The U.S. SEC charged Jonathan Lucas (CEO of online adult entertainment marketplace) for running a fraudulent initial coin offering or ICO campaign.
As per SEC’s lawsuit:
“Lucas made numerous materially false statements in a whitepaper and online to induce investors to participate in the ICO.”
It was also stated that Lucas claimed that the beta version of the adult-entertainment platform works, but there wasn’t. Moreover, Lucas also made up fictional team members of the company.
Lucas was able to raise about $63,000 in cryptocurrencies from more than 100 investors for Fantasy Market’s ICO.
The SEC stated Lucas mislead the prospective investors to promote the sale of his FMT tokens. Lucas also stated that the token would be listed on major exchanges and the company had verified that its investors were accredited but none of that was true.
Furthermore, according to the lawsuit, there was no token issued and the ethereum application did not exist. It was also said that the funds raised went to marketing instead of building their product.
“Lucas has consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment that imposes permanent injunctions from violations of the charged provisions; orders him to pay a civil penalty of $15,000; and imposes a five-year officer and director bar and a five year conduct-based injunction prohibiting Lucas from participating in any unregistered offering of securities, digital or otherwise, except for securities transactions for his own personal account. The proposed settlement is subject to court approval.” – as per US SEC’s lawsuit.