SEC Enters in Settlement Discussions with ICO Organizer Reggie Middleton

The U.S. Securities and Exchange Commission (SEC) revealed it has gone into settlement dialogs with Reggie Middleton, coordinator of the $14.8 million Veritaseum (VERI) initial coin offering (ICO).

In a filing with the New York Eastern District Court, published October 2, the watchdog said talks with the defendants have occurred before a pre-trial gathering.

This announcement comes following two settlements with the SEC over unregistered digital securities offerings. On October 1, data storage startup Sia arranged a $225,000 settlement over its $120,000 raise. On September 30, EOS creator Block.One consented to pay a $24 million penalty on a raise that amounted to $4.1 billion.

As per the first protest, Middleton asserted VERI tokens were not securities and eagerly misdirect investors about the token’s potential worth. He muddled his marketing strategy and at a few times, referred to the tokens as “software” or described them as prepaid gift vouchers to be utilized on a technological platform.

Middleton was additionally blamed for manipulating the securities’ worth post-ICO, and misusing at least $520,000 of investors’ funds for personal use.

In 2017, Middleton asserted a hacker took $8 million of assets raised during the ICO. The funds remain missing.

In an emergency action in August, the agency froze Middleton’s assets and requested the court to forbid him from managing a public company or participating in a digital asset securities offering.

On October 8, Magistrate Judge Ramon E. Reyes reschedule the pre-trial conference for November 14, to enable the parties to give their assets to settlement.