Skip to Content

SEC Pursues Charges for Another Fraudulent Initial Coin Offering (ICO)

July 31, 2020 Blog

Firm founder and Bitcoin lawyer Jake Zamansky has discussed the fraud risks associated with initial coin offerings (ICOs) in the past. While ICOs came into vogue when Bitcoin’s meteoric rise in value made front-page news a few years ago, they haven’t quite held their appeal since. However, many companies are still offering ICOs, and many scam artists are still trying to lure unsuspecting investors with “can’t miss” ICO investment opportunities.

Most recently, on August 13, 2020, the U.S. Securities and Exchange Commission (SEC) announced that it had settled charges against a Virginia-based company and its CEO for allegedly perpetrating a $5 million ICO scam.  

Company and Its CEO Charged with Making False Statements to Lure ICO Investors

According to the SEC, Boon.Tech and CEO, Rajesh Pavithran, raised approximately $5 million through the sale of “Boon Coins” in a fraudulent ICO. Specifically, the SEC alleges that Boon.Tech and Pavithran falsely claimed that Boon Coins were stable and secure investments because the company had developed technology that, “eliminated volatility inherent in the digital asset markets by using patent-pending technology to hedge Boon Coins against the U.S. dollar.” The SEC’s Press Release states that Boon.Tech did not actually have this technology.

The SEC is further alleging that Boon.Tech and Pavithran, “misrepresented to investors that Boon.Tech’s platform was faster and more scalable than its competitors because it was built on Boon.Tech’s own blockchain, when in reality the platform was being developed on the same public blockchain as its competitors.”

Without admitting or denying the allegations, Boon.Tech and Pavithran agreed to settle the SEC’s charges by disgorging the $5 million raised through the fraudulent ICO, paying an additional $750,000 in interest and penalties, destroying all Boon Coins, and refraining from future digital asset securities offerings.

ICO and Cryptocurrency Investors Need to Be Aware of the Risk of Fraud

Unfortunately, the types of fraudulent claims made by Boon.Tech and Pavithran are not unusual, particularly in the ICO and cryptocurrency investment sectors. In many cases, purported entrepreneurs rely on prospective investors’ lack of sophisticated knowledge about ICOs, cryptocurrency and blockchain technology to tout non-existent technologies. This makes it particularly important for prospective ICO and cryptocurrency investors to do their research prior to investing—not only with regard to the ICO or cryptocurrency itself but also with regard to the company’s claimed technology.

In addition to the red flags for more-traditional investment fraud scams, ICO and cryptocurrency investment fraud scams have a number of unique hallmarks as well. For more information, we encourage you to read:


  • Overview of Bitcoin and Cryptocurrency Investing


Do You Need to Speak with a Lawyer about Bitcoin or Alternative Cryptocurrency Investment Fraud?

If you believe that you may be a victim of ICO or cryptocurrency investment fraud, it is important that you speak with a lawyer promptly. Our lawyers represent ICO and cryptocurrency investors nationwide. To schedule a free, no-obligation consultation as soon as possible, call 212-742-1414 or tell us how we can reach you online now.

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.
View More