Artificial-intelligence powered job marketplace Boon.Tech is facing a roughly $5 million penalty from the Securities and Exchange Commission (SEC). On Thursday, the SEC settled with the firm and its CEO Rajesh Pavithran for fraud related to an initial coin offering (ICO).
The Boon.Tech ICO sold more than $5 million in so-called Boon Coins to 1,500 investors in the U.S. and worldwide during what the SEC has deemed an unregistered offering of securities. The tokens were intended to fund the job search platform.
The SEC alleged that Pavrithan and the firm misrepresented aspects of the token, including claims that the coins were more stable and secure. Boon.Tech claimed "patent-pending technology" was used to hedge the token against the dollar, but the SEC said it found the firm had no such technology.
Boon.Tech also allegedly claimed that the token was being built on the firm's own blockchain, when the SEC found it to be developed on a public blockchain that competitors also used.
Pavrithan and the firm agreed to settle the charges, requiring they pay back the $5 million to investors in addition to $600,000 in interest, as well as destroying all their remaining Boon Coins and delisting those on trading platforms. Pavrithan himself will pay a $150,000 penalty and be barred from serving on the board of a public company.