The Securities and Exchange Commission (SEC) has filed its latest complaint targeting another allegedly fraudulent initial coin offering (ICO).
According to a release, the SEC has charged Jonathan C. Lucas, the former founder and CEO of Fantasy Market, an online adult entertainment marketplace, with orchestrating a fraudulent ICO.
The SEC states that beginning in August 2017, Lucas raised approximately $63,000 in crypto from over 100 investors in an unregistered securities offering. The “Fantasy Market digital token” (FMT) sought to be used as payment for specific requested activities in adult entertainment purposes. The ICO sought to raise up to $25 million.
Fantasy Market is now defunct.
The SEC says that among other alleged misstatements, Lucas claimed that a “working-beta” version of the company’s adult-entertainment platform existed when one did not, presented a fictitious management team, and misrepresented his own experience.
After garnering media attention over investor complaints, the complaint states, Lucas returned the funds raised to investors, adds the SEC.
Lucas has consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment that imposes permanent injunctions from violations of the charged provisions; orders him to pay a civil penalty of $15,000; and imposes a five-year officer and director bar and a five year conduct-based injunction prohibiting Lucas from participating in any unregistered offering of securities, digital or otherwise, except for securities transactions for his own personal account.
The proposed settlement is subject to court approval.
The SEC has consistently pursued any ICO that took place post-DAO report, a document published by the SEC indicating the ICOs may be unregistered securities. The document was published in July 2017.