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The
U.S. Securities and Exchange Commission (SEC) said in a
statement that American Cryptofed "filed a materially deficient
and misleading" form when it sought to register the tokens,
known as "Ducat" and "Locke," as equity securities. The
disclosures did not contain required information about both the
tokens and the company, and contained materially misleading
statements, the SEC said.
The SEC alleged the company's form left out the required
information about the company's business, management and
financial condition, among other omissions, and also gave
inconsistent statements about whether the tokens are securities.
American Cryptofed Chief Executive Officer Marian Orr disputed
the SEC's view that the tokens are securities and said the
company had been trying to discuss the issue with the SEC when
the agency refused to respond to the firm's October rebuttal.
"The purported 'deficiencies' the SEC referred to were the lack
of attributes inherent to securities," she said in a statement.
"These are attributes that the two tokens (Locke and Ducat) of a
decentralized blockchain-based CryptoFed DAO monetary system
will never have."
The back-and-forth highlights the increasingly tense
relationship between the cryptocurrency industry and the top
U.S. markets regulator, which has taken a more aggressive
position under Democratic leadership.
SEC Chair Gary Gensler appears to have taken a more expansive
view of whether crypto assets fall under the SEC's purvey. He
has said the agency is examining cryptocurrencies in a number of
areas and has described the crypto world as a "Wild West"
riddled with fraud and investor risk.
(Additional reporting by Susan Heavey, Editing by Chris
Gallagher and Richard Pullin)
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