The Securities and Exchange Commission is blocking the registration as securities of two digital tokens issued by US Cryptofed DAO LLC, the agency said on Wednesday, because of alleged insufficient and misleading information on their registration forms.
Founded in July, American Cryptofed, which calls itself “the first Wyoming decentralized autonomous organization” on its website, submitted registration forms for the tokens Ducat and Locke as equity securities on September 16.
However, the SEC alleged that the form lacked certain essential information, such as the two tokens and information about the company’s business, management and financial position, including audited financial statements. The SEC said the form also allegedly contained misleading statements and omissions.
The SEC said in its order that the registration form will automatically become effective from next Monday without any action. As with Wednesday’s actions, however, tokens remain restricted and untraceable until these proceedings are resolved.
American Cryptofed Chief Executive Marion Orr said in an emailed statement that the company denies the shortcomings pointed out by the SEC in a letter dated October 12, adding that the company looks forward to future communications with the SEC, including It is through public hearing.
“The alleged ‘shortcomings’ that the SEC noted were a lack of inherent characteristics in the securities,” Ms. Orr said in the statement. “These are characteristics that two tokens of a decentralized blockchain-based cryptofed DAO monetary system… The SEC declined to respond to our rebuttal, although we have repeatedly asked for their written response.”
The action comes as SEC Chairman Gary Gensler said last week that the regulator would be “very proactive” in bringing the digital currency market under its investor protection framework. Mr Gensler also said that the crypto market would not mature without extensive oversight.
Law firm partner Sujit Raman said, “The SEC’s action confirms the close scrutiny that the agency continues to bring to entities in the rapidly growing digital assets sector, including those that employ novel corporate structures.” and offer novel financial products.” Sidley Austin LLP who previously served as Associate Deputy Attorney General in the Department of Justice.
This story has been published without modification to the text from a wire agency feed
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