Chicago Crypto Capital Employees Sued by SEC for Fraud & Unregistered Offering Sale

15 September 2022, 19:00 GMT+0000
Updated by Ryan James
15 September 2022, 19:00 GMT+0000
In Brief
  • The SEC has filed a lawsuit against Chicago-based DeFi advisory firm Chicago Crypto Capital.
  • The commission alleged the company defrauded their investors by selling unregistered securities.
  • The SEC Commissioner called on crypto companies to “get their tokens registered and regulated" just last week.
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DeFi advisory firm. Chicago Crypto Capital and its three employees are being sued by the Securities Exchange Commission (SEC) for fraud and conducting an unregistered offering.

The SEC has filed a lawsuit against Chicago Crypto Capital (sometimes called CCC), its owner Brian Amoah and two sales managers, Darcas Oliver Young and Elbert “Al” Elliott, for allegedly defrauding investors during their unregistered offering of crypto asset securities.

Firm took advantage of beginners

The company allegedly acted as unregistered broker-dealers and sold BXY tokens worth $1.5 million to approximately 100 investors from August 2018 to September 2019. The complaint alleged that they misled the investors, many of whom were beginners. They defrauded their investors about the way the token would be handled. 

According to the SEC, the accused faked the information provided to the investors regarding the custody and delivery of BXY, the markup charged by CCC, CCC’s liquidation of an investor’s BXY, their personal investments in BXY, and the issues arising with BXY’s issuer, Beaxy Digital Ltd.

“As a result of this alleged fraud, the SEC alleges that some of these investors never received their BXY tokens, and all those who invested paid an undisclosed markup on their BXY tokens,” the SEC statement says. 

The SEC also added that Young, one of the sales managers, had already entered a settlement and confessed to consenting to “the payment of disgorgement and a civil penalty, an associational bar, and injunctive relief.”

SEC on crypto clampdown

The commission has long been shaping the legal narrative around digital assets. Last week, SEC Commissioner Gary Gensler explained how he sees cryptocurrencies.  

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“Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Offers and sales of these thousands of crypto security tokens are covered under the securities laws.” He further encouraged crypto companies and executives to register “get their tokens registered and regulated,” urging crypto exchanges – both centralized and decentralized – to do the same. 

Meanwhile, Gensler suggested that Bitcoin should be treated as a commodity – the point of view he had expressed before – as it is trading like a precious metal. “A speculative, scarce—yet digital—store of value,” he added.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.