By Tyler S - Wallet Specialist - 06-08-2021
The Securities and Exchange Commission, or SEC, has made the news recently in light of a $30 million fraud case concerning a DeFi project. The defendants include a Cayman Islands-based corporation and two other individuals, Gregory Keough and Derek Acree.
The defending people may be the first-ever to stand in court regarding decentralised finance (DeFi). To support this, the SEC announced just Friday that this is the first case that required legal action involving securities using DeFi technology.
The SEC sued Blockchain Credit Partners and the people involved, Gregory Keough and Derek Acree. The legal action is due to the defendants operating a business selling more than $30 million in unregistered securities since early last year.
In reports, the SEC claims that the defendants, Keough and Acree, misled their customers about how the company ran their business. The SEC further says that Keough and Acree failed to disclose that they may not pay interest and profits from offering and selling mTokens.
The business project claimed to have been buying auto loans; on the other hand, the SEC declared the pair from Florida utilised personal funds from their Blockchain Credit Partners for their mToken interest plan. The price to buy crypto coin DMG fell due to a DeFi project shut down in February, causing investors not to redeem their tokens.
Reportedly, the pair, Keough and Acree, eventually agreed to a cease-and-desist order. The order involves the company's crypto market investment offers as well as $12.8 million in disgorgement and $125,000 fines per token.