Cryptocurrency

SEC fined startup Boontech $ 150,000 for fraud and illegal ICO

The US Securities and Exchange Commission (SEC) fined cryptocurrency startup Boontech $ 150,000 for providing false information to investors and conducting an unregistered ICO.

According to the SEC, between November 2017 and January 2018, Boontech sold $ 5 million worth of Boon Coins. More than 1,500 American investors took part in the token sale. The Commission accused Boontech co-founder Rajesh Pavithran of selling unregistered securities and defrauding investors. 

According to the SEC, Pavitran provided false information about his project, which allegedly used a special technology that eliminates the volatility of Boon Coins tokens, hedging risks with the US dollar. Boontech management claimed to have filed a patent application for this technology and it is pending. The SEC has warned that no such technology exists.

Pavitran also stated that his platform is much faster compared to other platforms, since it was developed on the basis of a closed blockchain. The SEC called these statements false. In fact, Boontech used an open blockchain just like its competitors. 

Pavitran pleaded not guilty, but did not dispute the Commission’s charges either. He agreed to return the $ 5 million collected during the ICO, as well as pay the interest received from the sale of tokens. In addition, the SEC demanded that Pavitran pay a $ 150,000 fine and banned him from working as a director in public companies.

Recall that at the beginning of the year, the SEC fined the startup Enigma MPC $ 500,000 for an unregistered token sale. The commission also brought charges of conducting an illegal ICO on the Opporty B2B marketplace. In addition, the SEC announced last month that it will track transactions on the Binance Chain blockchain using CipherTrace tools.

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