SEC Orders Public Proceedings Over 'Misleading' Crypto Offerings

The Securities and Exchange Commission instituted administrative proceedings against Wyoming-based American CryptoFed DAO to determine whether a stop order should be issued to suspend the registration of the firm’s planned offer and sale of two crypto assets, the Ducat and Locke tokens.

In an order filed on Friday, the SEC’s Enforcement Division alleged that a Form S-1 registration statement filed by American CryptoFed on Sept. 17, 2021, failed to contain required information about American CryptoFed’s business, management and financial condition, including audited financial statements.

The Form S-1 also contained “materially misleading” statements and omissions, including inconsistent statements about whether the tokens are securities, according to the SEC’s Enforcement Division.

The Enforcement Division also alleged that American CryptoFed failed to cooperate during an examination of its registration statement.

“An issuer seeking to register the offer and sale of crypto assets as securities transactions must furnish the required disclosure information to the SEC,” David Hirsch, chief of the Enforcement Division’s Crypto Assets and Cyber Unit, said in a statement.