Published On: Wed, Aug 21st, 2019

Veritaseum: Reggie Middleton lashes out ahead of court case that will rock crypto world | City & Business | Finance

The Securities and Exchange Commission (SEC) froze all of the New York company’s assets last week after filing an emergency action lawsuit. The SEC cited a “fraudulent ICO (initial coin offering)” stating its VERI token was an unregistered security sold to the public with “material misrepresentations and omissions”. Reggie Middleton – Veritaseum’s founder and CEO – has been ordered to appear before a judge on Monday to answer charges relating to the token which was launched in 2017.

However, Middleton’s lawyers last night countered by filing an opposition case in an effort to unfreeze assets worth several million dollars.

“The tokens are not investments and are not securities,” says the counter claim.

“They do not represent an ownership interest in Veritaseum or its assets; do not give holders any right to share in the company’s profits; do not confer voting rights; and do not pay dividends or interest.

“Middleton consistently emphasised the potential uses of the blockchain-based software platform Veritaseum was developing and that the tokens should not be purchased as an investment or for speculation.

“In addition, on at least 15 occasions, Mr Middleton publicly stated that VERI tokens are not investments.”

Beleaguered Middleton’s lawyers also stressed their client had previously cooperated with the SEC over several other matters since 2017.

They added: “Mr Middleton and Veritaseum produced to the SEC voluminous documents and information in response to subpoenas and voluntarily provided additional information in response to a large number of informal requests by the SEC staff.”

Despite the counter claim, the SEC’s current form against cryptocurrency firms is likely to see the courts take a dim view of Middleton’s activities.

The SEC’s subpoena and subsequent freezing of assets was as curt as it was crystal clear.

“This is emergency action to stop the Defendants’ further dissipation of the approximately $8 million of investor proceeds that remain from approximately $14.8 million they fraudulently raised in 2017 and early 2018 in an offering of digital securities,” it read.

“The defendant, a Brooklyn-based self-described financial guru, raised the $14.8 million by making material misrepresentations and omissions about the unregistered securities they offered.”

Since the summons, the price of the Veri token has tumbled a staggering 76% to an all-time low of $4.07.

The hearing has been set for Monday, August 26.

Coin Rivet is a website bringing news, information, analysis, opinion and insight from the fast-moving blockchain world.

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