SEC Fines Crypto Fund $50K and Issues Cease-and-Desist
The US Securities and Exchange Commission ("SEC") has ordered fund manager CoinAlpha Advisors LLC to impose a fine of $ 50,000 on what is considered an unregistered securities sale.
According to an order issued Friday, CoinAlpha raised funds in October 2017 with the goal of investing in digital assets. We reached possible investors and raised more than $ 600,000 in the process.
CoinAlpha has filed a "Notice of Notice of Exemption from Security," but the company is not exempt or has not enrolled in the SEC. It was therefore necessary to obtain a stock investor effectively in accordance with a court order.
The SEC also said that after contacting the SEC for the first time, the company did not have the proper know-how to ensure that all investors get their credentials even though they hired a third party to verify their status.
After CoinAlpha contacted the SEC, CoinAlpha ordered all fees back to investors:
"In total, 22 investors invested $ 608,491 in the fund. In October 2018, CoinAlpha solved the fund according to the authority granted in the Limited Partnership Agreement of the Fund after the committee staff contacted them on this matter."
In particular, the order underlines CoinAlpha's cooperation with the SEC, and regulators are only imposing sanctions on negotiations with the company.
These sanctions prohibit CoinAlpha from violating future securities laws and include a fine of $ 50,000 paid to the SEC during the redemption period. According to this document, CoinAlpha did not acknowledge or deny the allegations filed by the agency.
The SEC's response has had similar effects on start-ups such as Airfox, Paragon, and EtherDelta founder Zachary Coburn.
As each company or individual was found to be in breach of the securities laws, the SEC cooperated in each case, and each imposed a relatively low penalty.
CoinAlpha has not responded to a media comment request.
SEC image via Kristi Blokhin / Shutterstock
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