America Securities and Alternate Fee (SEC) announced that it has agreed to a settlement with the CEO of purported cryptocurrency firm Longfin in a press release, Jan. 3.
Venkata Meenavalli agreed to pay $400,000 in disgorgement and penalties to resolve the SEC’s fraud motion in opposition to him, topic to court docket approval.
The SEC’s criticism alleged that Longfin and Meenavalli falsely claimed that the corporate was primarily based within the U.S. to be able to acquire a regulation A+ qualification for its providing. Over 400,000 Longfin shares have been then allegedly distributed to Meenavalli’s associates, which was once more misrepresented to be able to acquire a Nasdaq itemizing.
The criticism additionally states that over 90% of Longfin’s reported 2017 income “was fictitiously derived from sham commodities transactions.”
As Cointelegraph reported again in December 2017, Longfin’s shares surged over 1,000 % after information broke that the agency was buying an unvalued cryptocurrency firm known as Ziddu. Meenavalli protested on the time that this market cap was not justified, whereas his associates have been allegedly offloading their shares to unsuspecting buyers.
Buyers raised considerations once they found that Meenavalli additionally owned 95% of Ziddu’s dad or mum firm, and the inventory dropped 30% when the SEC investigation was first announced in April 2018.
Complete funds recovered tops $33 million
Meenavalli’s settlement consists of his full wage whereas appearing as Longfin CEO ($159,000), prejudgement curiosity of $9,000, and a civil penalty of $232,000. He may also surrender all his Longfin inventory, and is barred from appearing as an officer or director of a public firm completely.
As Cointelegraph reported in September 2019, a New York court docket ordered Longfin to pay virtually $6.eight million in penalties associated to the alleged fraud. In a separate motion introduced by the SEC concerning the alleged unregistered distribution and sale of Longfin inventory, a court docket ordered over $26 million in disgorgement and penalties in June 2019.