The U.S. Securities and Exchange Commission (SEC) charged John Wise and his company Loci Inc for allegedly selling an unregistered digital asset and making false statements related to its sale, according to a Tuesday release from the Commission.
The SEC alleges that, between August 2017 and January 2018, Loci and Wise raised $7.6 million by selling the unregistered “LOCIcoin” token, and that Wise used over $38,000 of the venture funds for personal use. Through these purported actions, Wise and Loci Inc violated portions of the Securities Exchange Act of 1934 and the Securities Act of 1933.
“Loci and its CEO misled investors regarding critical aspects of Loci’s business,” Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said in the statement. “Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.”
Loci and Wise destroyed any outstanding LOCIcoins and have agreed to not partake in future digital asset offerings. Neither party has yet confirmed or denied the SEC’s allegations, according to the release, though Loci and its leadership must pay a $7.6 million dollar civil penalty.
According to a recent report from the blockchain analysis firm Elliptic, the SEC leads other U.S. regulators in cracking down on crypto misconduct — mostly in the form of unregistered securities.