US SEC Fines and Suspends Operations of Tomahawkcoin Over Fraudulent ICO

On the 14th of August, the United States SEC (Securities and Exchange Commission) announced that its regulatory nest had caught the creator of Tomahawkcoin because he was found involved in fraudulent practices relating to its recent ICO (Initial Coin Offering).
The cryptocurrency firm, Tomahawkcoin, which was led by David T. Laurance, launched as a token through his corresponding company Tomahawk Exploration LLC, however, it was unable to raise funds through an ICO in 2017.
The company initiated tokens through a “Bounty Program in exchange for promotional services,” the CEO, who has a previous record for securities fraud, again “violated the registration and anti-fraud provisions of the federal securities laws.” It was expressly stated in the report that:

“The SEC’s Office of Investor Education and Advocacy (OIEA) today issued an Investor Alert to encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on OIEA’s Investor Bulletin about ICOs is another resource that describes potential warning signs of investment fraud including “guaranteed” high investment returns and unlicensed sellers.”

The chief of the regulator’s Cyber Unit, Robert A. Cohen, while making comments on the case, noted that:

“Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs.”

Tomahawk fraudulently presented investors with a baseless offer to drill for oil in California, erroneously claiming it had the right to do so when clearly, no such authority was given from appropriate quarters, the order further stated that:

“The SEC’s order finds that the defendants’ promotional materials used inflated projections of oil production that were contradicted by the company’s own internal analysis and misleadingly suggested that Tomahawk possessed leases for drilling sites when it did not.”

The further explanation of the fraudulent misrepresentation was summarized in the section of the order which states that “The order also finds that Tomahawk claimed that token owners would be able to convert the Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens.”
Though Laurance allegedly consented to a permanent officer-and-director bar and a penny stock bar from the SEC, along with a $30,000 fine which shows an acknowledgment of guilt for the fraudulent Initial Coin Offering (ICO).

SEC’s Investigation on Tomahawkcoin

The successful Securities Exchange Commission’s investigation was duly conducted by Justin Lichterman, Victor Hong and Serafima Krikunova of the San Francisco Regional Office, with support from Joseph Dugan of the Fort Worth Regional Office. The case was supervised by Steven Buchholz of the SEC’s Cyber Unit and Mr. Cohen. The SEC also appreciates the aid from the California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources.
This commendable move by the United States Securities and Exchange Commission is yet another testimony of its effective regulatory and oversight actions over Initial Coin Offerings which are driven by the passion for ensuring that the company complies with statutes of regulations of force in the country. In May, the US SEC launched a demo ICO to further the awareness of the most popular warning signs of Initial Coin Offering fraud cases.
Earlier in July, in a study carried out by an ICO advisory agency, Statis Group, it was discovered that more than staggering 80 percent of Initial Coin Offerings in 2017 were fraudulent, or better still, scams. Based on the research, “over 70 percent of ICO funding (by $ volume) to-date went to higher quality projects, although over 80 percent of projects (by # share) were identified as scams.”
Perhaps sometimes in the past, the idea of fraudulent ICO’s might sound pleasing and easy to get away with by rogues, but indeed, this (to a reasonable extent) has marked the seriousness of the regulatory bodies as individuals with fraudulent intent would have to think twice.

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