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SEC settles with Bitqyck and its founders accused of $13m fraud

Aug 30 2019
By
Jonathan Smith

 

The US Securities and Exchange Commission (SEC) has settled with founders of crypto exchange Bitqyck over an alleged $13 million fraud. Bitqyck’s founders Bruce Bise and Sam Mendez will pay a civil penalty of $8.5 million on top of disgorgement and prejudgment interest.

 

The SEC charged Dallas company Bitqyck and its founders with defrauding over 13 million investors in operating unregistered digital asset exchange and unauthorized offering. More specifically, Bitqyck offered their own token Bitqy, and falsely claimed that each Bitqy provided fractional shares of Bitqyck stock through a “smart contract.” They also offered BitqyM tokens, which allegedly provided an interest in a Bitqyck cryptocurrency mining facility powered by below-market rate electricity

 

Thus, the exchange and its founders fraudulently raised millions of dollars.

 

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,” commented 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,” he added.

 

The SEC has settled charges with nearly 40 crypto startups which have conducted token sales over the past few years, according to the SEC database.

 

TAGS: SEC  Bitqyck  crypto scam  US 
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