SEC accuses crypto startup Loci of selling unregistered securities

The U.S. Securities and Exchange Commission (SEC) has brought charges against the crypto startup Loci and its founder John Vaize for selling unregistered securities.

According to the SEC, from August 2017 to January 2018 Loci raised $7.6 million through the sale of the unregistered token LOCIcoin. Vaize used more than $38,000 for personal purposes. The regulator regarded this as a violation of the Securities Exchange Act of 1934 and the Securities Act of 1933.

“Loci and its CEO misled investors about critical aspects of the startup’s business. Token buyers are entitled to full disclosure of information in order to make informed investment decisions,” the statement said.

The SEC ordered the startup and its founder to unwind LOCIcoin and pay a $7.6 million penalty. The settlement also requires them to refrain from participating in future token offerings.

Earlier, analytics firm Elliptic estimated at $1.38 billion the amount of SEC penalties related to unregistered securities sales. The figure covers all such episodes from 2014 to May 2021.

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