SEC Charges Virginia-based Boon.Tech And CEO For Running Fraudulent ICO
By RTTNews Staff Writer | Published: 8/14/2020 10:48 AM ET
The U.S. Securities and Exchange Commission (SEC) charged Virginia-based Boon.Tech and its CEO Rajesh Pavithran for fraud and registration violations in connection with a $5 million initial coin offering (ICO) of digital asset securities.
Boon.Tech and Pavithran are charged of raising about $5 million by selling Boon Coins to more than 1,500 investors in the U.S. and worldwide to develop and market a platform to connect employers posting jobs with freelancers seeking work.
According SEC's order, Boon.Tech and Pavithran failed to register the offering as the Boon Coins were offered and sold as investment contracts and were therefore securities. They also made false and misleading statements, including claiming that Boon Coins were stable and secure as they use patent-pending technology to hedge Boon Coins against the U.S. dollar.
The company also 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, while it was developed on the same public blockchain as its competitors.
Pavithran and Boon.Tech defrauded investors by convincing them to fund this endeavor based on the allure of innovation that simply did not exist.
The SEC's order finds that Boon.Tech and Pavithran violated the antifraud and registration provisions of the federal securities laws. Without admitting or denying the SEC's findings, Boon.Tech and Pavithran agreed to settle the charges.
According to the settlement order, Boon.Tech will be required to disgorge the $5 million raised in the ICO plus prejudgment interest of $600,334.
Boon.Tech and Pavithran will also have to destroy all Boon Coins from where ever they are available and refrain from participating in any future offerings of digital asset securities. Further, the order requires Pavithran to pay a penalty of $150,000 and bars him from serving as an officer or director of a public company.
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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.
Article reposted on Markethive by Jeffrey Sloe