SEC Fines Blockchain Author, Alex Tapscott and his Firm over Securities Violations
Alex Tapscott, the Canadian business author, advisor, and the owner of NextBlock Global investment firm, whose works basically revolves around cryptocurrencies and blockchain technology has today been fined $25,000 by the United States Securities and Exchange Commission (SEC) over securities violations. According to the SEC, NextBlock has been offering unregistered securities with the SEC and misleading investors pertaining to digital asset investments. Also, the platform made false representations that four prospective investors were serving as NextBlock’s advisors.
As disclosed by the five-page administrative proceeding;
“These misrepresentations were part of the selling point of NextBlocks’s fundraising effort: that NextBlock and Tapscott had access to, and unparalleled relationships with … the highest profile figures in the blockchain community.”
According to the notice, the misleading representations led to a convertible debenture offering of about $20 million CAD from over 100 investors across the United States, Canada, and several other countries. Of the total investments raised 24% was from the U.S. and that’s where the SEC comes in.
The Tapscott Settlement
The SEC said it has taken into account the remedial acts undertaken by Tapscott and his firm when agreeing to the terms of the settlement. The settlement had previously been filed by the Ontario Securities Commission (OSC) together Next Global Limited and Alex Tapscott and was approved on Monday by a panel of OSC Commissioners. During the settlement process, Tapscott voluntarily declined about $3 million of his shares in carried interest that he was entitled to based on NextBlock’ssuccess. He also stated that he and NextBlock personally knew the four investors named on the slide decks, however, he acknowledged that they were not advisors to the firm and should not have been addressed as such. The SEC also said that, following the firm’s payment of a 700,000 Canadian dollar administrative penalty, it had not imposed a further civil penalty on the company.
SEC Tough on Fraud
About six months ago, the SEC fined boxing Icon, Floyd Mayweather and MusicProducer, DJ Khaled $750,000 over an ICO fraud lawsuit. According to the SEC, the two celebrities failed to disclose payments from three ICOs as they promoted the -defunct cryptocurrency firm Centra Tech to millions of followers on social media. In as much as Floyd Mayweather and DJ Khaled were not creators of the ICO market and have been freed, they paid fines of $600,000 and over $150,000 respectively and also made a promise to the SEC not to promote securities for three and two years respectively.