The U.S. Securities and Exchange Commission has settled with a Dallas digital company for millions of dollars.
The agency said it made the deal with Bitqyck Inc. and its founders, who allegedly defrauded investors in securities offerings of two digital assets, Bitqy and BitqyM.
Bitqyck consented to an order requiring it to pay $8.4 million.
Bitqyck and founders Bruce Bise and Sam Mendez created and sold Bitqy and BitqyM in unregistered securities offerings to more than 13,000 investors, raising more than $13 million, according to the agency. Investors allegedly received $4.5 million for referring new investors to Bitqyck but lost over two-thirds of their investment in the company.
Bise consented to pay $890,254 while Mendez consented to $850,022.
The SEC says the founders misrepresented QyckDeals, a daily deals platform using Bitqy, as an online marketplace, and falsely claimed that each Bitqy token provided fractional shares of Bitqyck.
The complaint alleges that the defendants falsely told investors that BitqyM tokens provided an interest in a Bitqyck cryptocurrency mining facility with below-market rate electricity. In reality, Bitqyck did not have access to discounted electricity and didn’t own any mining facility.
Bitqyck also is alleged to have illegally operated TradeBQ, an unregistered national security exchange offering trading in a single security, Bitqy.
“Because digital investment assets represent a new and exciting technology, they can be very alluring, especially if investors believe they are getting in on the ground floor and will own part of the operations,” said David Peavler, director of the SEC’s Fort Worth Regional Office. “We allege that the defendants took advantage of investors’ appetite for these investments and fraudulently raised millions of dollars by lying about their business.”
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