In another event of bringing regulatory pressure to the cryptocurrency sector, the U.S. Securities and Exchange Commission (SEC) charged Sergii Grybniak, the founder of Opporty. Shared in a press release on Jan 21, the SEC notes that Grybniak raised $600,000 in the project’s initial coin offering (ICO) and that he was charged for claiming that Opporty is ‘100% SEC compliant.’
Opporty’s ICO token sale started in September 2018 and lasted until the end of October. The project’s goal was to develop a blockchain ecosystem that would serve small businesses and their customers, with a focus on clients from the United States. According to Opporty’s official website, their new platform targeted small firms who would list their services and create agreements via smart contracts.
During the ICO token sale, Opporty managed to raise $600,000 from around 200 investors, which the SEC deemed an unregistered securities sale. Aside from an unregistered securities sale being the primary charge, the SEC also states that Opporty made misleading claims and statements in an attempt to encourage more investors to participate.
One of these false statements includes Opporty claiming to have onboarded more than thousands of verified providers who would participate and conduct business on the new platform. The SEC claims that the majority of the named ‘providers’ have not expressed what Opporty claimed.
In the end, the SEC revealed that the project tried to fool investors by hinting at a partnership with a ‘major software company,’ a lie commonly told in the ICO space. As the founder of Opporty is a resident of Brooklyn, the SEC will issue several penalties. Sergii Grybniak will have to return all raised ICO funds to investors and face civil penalties. Moreover, he will no longer be able to host future ICOs.
Experts claim SEC inconsistently targets projects
The charge against Opporty represents a disparity compared to previous SEC cases in the sector. Historically, the SEC targeted high-level crypto and blockchain projects who raised significantly larger sums of money. They include: Boaz Manor’s 30 million ICO, Kik’s $97 million ICO, and Telegram’s $1.7 billion ICO.
Taking a look at other projects, some notable cases stand out and show that the SEC is far more flexible with other companies. For example, the SEC settled a $24 million charge against Block.one, who held a $4 billion ICO. Additionally, the security status of XRP is unknown and there is no clear indicator that the SEC will launch an investigation any time soon.
In an announcement on Jan 7, the SEC promised that it would bring a gentler approach regarding cryptocurrency compliance in 2020. However, the objective situation shows that companies such as Telegram will face indefinite regulatory scrutiny while others will be spared.
On another note, initial exchange offerings (IEO) may face a crackdown by the U.S. regulatory agency. As CryptoPythia reported earlier, the SEC warned investors to stay away from IEOs since they may have conducted a violation of the federal securities laws.