SEC settlement talks with alleged fraud Veritaseum ICO

The Securities and Exchange Commission (SEC) of the United States has initiated settlement talks with Veritaseum, an alleged fraudulent cryptocurrency company.

October 10, 2019, | AtoZ Markets –  About two months earlier, SEC started legal action against the CEO of Veritaseum Reginald Middleton and his companies Veritaseum, LLC, and Veritaseum, Inc. The regulator confirmed that it is engaged in negotiations of settlement with the defendants.

In early October, the SEC filed a Motion to Adjourn conference at the eastern district court in New York. The SEC explains that the parties were engaged in settlement discussions. To let the parties to dedicate their resources to the settlement, They together requested that the Court set the scheduling conference no earlier than November 11, 2019.

On October 8, 2019, Magistrate Judge Ramon E. Reyes agreed to reschedule the initial conference for November 14, 2019.

VERI Token Scam

In this case, the defendants are accused of raising $ 14.8 million by making false statements and material omissions about the unregistered securities they offered: digital goods called “VERI,” “VERI Tokens” or “Veritas.”

According to the SEC’s complaint, the defendants deceived investors about their previous business and the use of the proceeds from the offering. They had touted the demand for VERI from oversized investors and claimed to have a product ready to make millions of dollars in revenue when that product didn’t exist. They have placed a series of manipulative operations into VERI tokens to increase the price and induce investors to buy more tokens from the ICO phase of the Offering.

To avoid registration requirements of federal securities laws, Middleton attempted to remodel VERI as “prepaid fees ” or “software,” and likened them to gift cards. To encourage purchases during the ICO phase of the offer, the defendants told potential investors that Veritaseum had products ready for the market that would replace brokers, banks, and hedge funds. These statements were all false. There were no products “ready for shipment” or that would have yielded millions of revenues or replaced financial institutions.

The SEC notes that the Offering was illegal, as there was no registration statement filed or in force for the offers and sales of VERI, and no exemption from registration was applied.

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