The US Securities and Exchange Commission (SEC) has settled charges with digital assets company Bitqyck Inc. and its founders.
The SEC revealed the advancement in a press release on August 29. As per the announcement, Bruce Bise and Sam Mendez are the founders of Bitqyck — a firm that facilitated security offerings for digital assets Bitqy and BitqyM in Dallas, Texas. The firm asserted that Bitqy tokens gave investors fractional shares of company stock through a smart contract. Moreover, Bitqyck stated that BitqyM tokens would provide holders with interest in a cryptocurrency mining facility running on sub-market-rate electricity, according to the press release.
The SEC affirmed in its complaint that both of these claims were untrue. The SEC charged that the founders falsely misrepresented a platform called QyckDeals, which was a deals platform for Bitqy tokens. In conclusion, the SEC charged the company with illicitly running an unregistered, national security exchange for Bitqy dubbed TradeBQ.
The SEC reports that Bitqyck secured more than $13 million in fundraisers for its unregistered securities. Furthermore, the release reads that investors got $4.5 million through referrals, but still lost more than two-thirds of their investments as a whole.
The announcement stated that Bitqyck and its founders have settled with the regulator. According to the settlement agreement, Bitqyck will pay $8,375,617, and Bise and Mendez will pay individual fines of $890,254 and $850,022.
SEC chairman Jay Clayton earlier told Bloomberg that he doesn’t plan to alter securities laws to suit digital assets. He expressed:
“I think a lot of people got excited that somehow we would change the rules to accommodate the technology and they invested their time and effort thinking that would happen […] I have been pretty clear from the start, that ain’t happening.’’