SEC fines TokenLot. Is Tokenlot scam or reliable?


SEC reaches settlement with TokenLot and Crypto Asset Management. The regulator notes that both crypto-related firms have been operating in the US without any authorization to do so. Is Tokenlot scam or reliable?

12 September, AtoZ Markets The US Securities and Exchange Commission, one of the primary financial markets’ regulators in the US, has announced that it has charged two cryptocurrency companies. 

SEC Crypto Asset Management Settlement

The regulator noted that it also has reached agreements with the two companies and their owners. The securities regulator has earlier alleged that Crypto Asset Management LP (CAM) along with its principal, Timothy Enneking, had marketed themselves under false pretenses. The regulator has alleged that Enneking has raised more than $3 million back in 2017 and claimed that the company has been was “the first regulated crypto asset fund in the United States.”

As per the statement from the SEC, Mr. Enneking and his company have agreed to the cease and desist order of the regulator. They are expected to pay a penalty of $200,000, and it is known that they did admit or deny the agency’s findings. 

This is not the first time the SEC issues cease-and-desist orders to companies that operate in the cryptocurrency sector. However, this case emerges as the first to find the fault with registration statements that have been published by the cryptocurrency investment entity.

SEC Reaches Settlement with TokenLot

Another cease-and-desist order has been issued by the US EC for the TokenLot LLC and its owners, Lenny Kugel, and Eli L. Lewitt. The regulator has alleged that the aforementioned entity and individuals have been acting as unregistered broker-dealers.

The SEC has stated that TokenLot “received orders from more than 6,100 retail investors and handled more than 200 different digital tokens, which the SEC found included securities.” TokenLot has been described as a kind of “ICO Superstore.”

Just like in the case of CAM, Kugel, Lewitt, and TokenLot did not admit or deny any of the SEC’s findings and agreed to pay $471,000 in disgorgement plus $7,929 in interest. Moreover, Lewitt and Kugel are also anticipated to pay $45,000 each in penalties. They also “agreed to industry and penny stock bars and an investment company prohibition with the right to reapply after three years.”

The co-director of the SEC’s Enforcement Division, Steven Peikin, has stated in the announcement:

“The penalties, in this case, reflect the prompt cooperation and remedial actions by TokenLot, Kugel, and Lewitt.”

Noteworthy, Lewitt and Kugel’s deal also states that they find “an independent third party to destroy TokenLot’s remaining inventory of digital assets.”

SEC Crypto Companies’ Oversight

At the beginning of August, AtoZ Markets reported that SEC has reportedly sent information requests to a number of the US brokerage firms that are engaged in cryptocurrency trading. According to some of the online reports, this move comes as a part of the regulatory attempt to get a hold of the rapidly evolving cryptocurrency market.

Aside from this, the investigation initiated by the US SEC also looks into the brokers’ business practices and the way they deal with clients. Moreover, the regulator examines the fees generated from cryptocurrency trading, ICOs and financing. The SEC’s requests also look for information regarding the structure for sales, marketing materials, clearing agreements, and details concerning personnel and advisors involved. 

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