SEC moves to suspend sale of American CryptoFed DAO tokens

Quick Take

  • The SEC said it has started administrative proceedings against Wyoming-based American CryptoFed.
  • Measure aims to suspend the registration of the offer and sale of the Ducat token and the Locke token.

The Securities and Exchange Commission has started administrative proceedings against American CryptoFed, a Wyoming-based decentralized autonomous organization (DAO), to weigh a stop order to suspend the registration of the offer and sale of its Ducat and Locke tokens.

The SEC said a Form S-1 registration statement filed by American CryptoFed last year did not include required information about the company's business, management and financial condition.

The agency also said the statement contained "materially misleading statements and omissions, including inconsistent statements about whether the tokens are securities."

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“An issuer seeking to register the offer and sale of crypto assets as securities transactions must furnish the required disclosure information to the SEC,” David Hirsch, chief of the enforcement division’s crypto assets and cyber unit, said in a statement. "American CryptoFed not only failed to comply with the disclosure requirements of the federal securities laws, but it also claimed that the securities transactions they seek to register are not in fact securities transactions at all."

The SEC said an investigation was conducted by Martin Zerwitz and Michael Baker of the SEC’s crypto assets and cyber unit.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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About Author

Nathan Crooks is the U.S managing editor at The Block, based in Miami. He was previously at Bloomberg News for 12 years, where he helmed coverage of South Florida after roles as a breaking news editor and bureau chief in Caracas, Venezuela. He's interviewed presidents, government ministers and CEOs, and, besides crypto, has covered major news events on the ground from earthquakes to hurricanes to the Chilean mine rescue in 2018. Nathan, a native of Clarion, Pennsylvania, holds a bachelor's degree from the University of Toronto, where he completed a specialist in political science, and an MBA from American University in Washington, D.C.

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