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SEC Files Charges Related to Three More Fraudulent Initial Coin Offerings (ICOs)

September 25, 2020 Blog

The fraudulent initial coin offerings (ICOs) just keep coming. In September 2020, the U.S. Securities and Exchange Commission (SEC) issued two press releases announcing charges in connection with three fraudulent ICOs. Here, Bitcoin and cryptocurrency investment fraud lawyer Jake Zamansky discusses the SEC’s charges and what ICO investors should do if they have concerns about fraud.

eSports and Gambling Platform Charged with Conducting Unregistered ICO

On September 15, 2020, the SEC announced charges against Seattle-based Unikrn Inc., operator of an eSports and online gambling platform. According to the SEC, “between June and October 2017, Unikrn raised approximately $31 million through its offering of the UnikoinGold (UKG) token.” Unikrn Inc. also reportedly told investors that it planned to used the proceeds to improve its software and develop new applications, that it would, “facilitate a secondary trading market for the tokens and that its efforts to increase the usages for the UKG token would increase demand for and in turn, the value of, the tokens.”

However, Unikrn failed to register its ICO or qualify for an exemption, the SEC’s press release states; and, as a result, the company faced an investigation by both the SEC and the Washington State Department of Financial Institutions. The press release indicates that Unikrn agreed to settle the SEC’s charges by paying a $6.1 million penalty (equal to “substantially all of the company’s assets”) and disabling its UKG tokens.

Rapper T.I. and Others Charged in Connection with Two Fraudulent ICOs

Four days earlier, the SEC announced charges against rapper T.I., film producer Ryan Felton, and three other individuals in relation to alleged fraudulent ICOs for the companies FLiK and CoinSpark. According to the SEC’s press release, “Felton allegedly misappropriated the funds raised in the ICOs [and] secretly transferred FLiK tokens to himself and sold them into the market, reaping an additional $2.2 million in profits.” T.I. is accused of falsely claiming to be a co-owner of FLiK on social media, encouraging his followers to invest in the FLiK ICO, and asking a “celebrity friend” to promote the ICO as well. The other individuals charged in connection with the ICOs are accused of promoting the unregistered ICOs and promoting the ICOs without disclosing that they were promised compensation for doing so.

Have You Invested in a Fraudulent ICO?

If you have invested in a fraudulent ICO, you should consult with an attorney promptly. Even if the SEC is able to disgorge wrongful profits and collect fines through its enforcement efforts, this does not necessarily mean that you will recover all (or any) of your lost investment. However, a lawyer who has experience handling cases involving Bitcoin fraud and other types of cryptocurrency fraud can file a lawsuit on your behalf and can seek to collect the full compensation to which you are legally entitled.

Speak with a Lawyer About Your Case for Free

For more information about seeking to recover your investment losses from a fraudulent ICO, call us at 212-742-1414 or contact us online. Located in the heart of Wall Street, our firm represents defrauded investors in FINRA arbitration and securities fraud litigation nationwide.

Client Reviews

“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
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