US Authorities File Lawsuit Against Illegal Token Sale
The representatives of the US financial regulator FINRA sued a Massachusetts resident in securities frauds, as he illegally sold them in the form of tokens. It was the organization's first-ever case related to cryptos, according to the FINRA website.
It is assumed that the accused Timothy Tilton Ayre illegally distributed HempCoin tokens. As advertised, HempCoin is the first crypto supported by securities with the possibility of mining. The token also served as an investment tool for Rocky Mountain Ayre, a trading company. In fact, the token was not registered as a security, and FINRA also adds a complaint to the lawsuit about misleading other traders.
HempCoin appeared in 2015, then Ayre obtained the ownership of the project and announced that Rocky Mountain Ayre will support the token. Trading operations were conducted on two crypto platforms until the end of October 2017. During this time, investors have mined more than 80 million tokens (according to CoinMarketCap, the current circulating supply is 241 million).
It is reported that Ayre can speak to a disciplinary panel if he agrees to answer the charges. When found guilty, a trader faces a fine or a suspension from the securities market for good. In addition, the court can sentence Ayre to pay damages.
FINRA was established by the US Congress in 1939 to oversee the securities market of those firms that didn’t receive quotations from traditional institutions, such as the New York Stock Exchange.
Also, US regulators will soon be controlling ICO on a par with securities.