The United States Securities and Exchange Commission (SEC) has stopped the registration of two tokens from American CryptoFed DAO LLC, a Wyoming-based company. The SEC indicates in a statement that it has initiated proceedings against the aforementioned company.
The SEC explains in a release that on September 16, American CryptoFed submitted a “materially flawed and misleading” registration form. Through the so-called Form 10, the company intended to register the “Ducat” and “Locke” tokens as equities. The SEC’s Compliance Division alleges that Form 10 did not contain certain required information about the two tokens. Nor about the business, management and financial condition of American CryptoFed. Neither of its audited financial statements. The Compliance Division states that Form 10 contains materially misleading and inconsistent statements and omissions as to whether the “Ducat” and “Locke” tokens are securities.
Wyoming, the oasis of cryptocurrencies and US DAOs
Wyoming’s CryptoFed DAO and SEC
Kristina Littman, Chief of the Cyber Unit in the SEC’s Compliance Division, has indicated that issuers attempting to raise funds from the public must provide the information necessary for investors to make informed decisions. “We allege that American CryptoFed made materially misleading statements and did not provide the legally required information on its registration form,” it says.
The statement includes that the SEC order initiates administrative procedures to determine whether to protect investors it is necessary to deny or suspend the effective date of the token registration. The regulator specifies that the registration of CryptoFed tokens is suspended until a judge rules. Likewise, the SEC Office of Investor Education and Defense has issued a alerts investors to claims that the SEC has approved deals.
World’s first public DAO
CryptoFed DAO issued a release on September 17, in which it reported the filing of Form 10 with the SEC for the registration of the aforementioned tokens. The company indicated that both tokens had been issued on the CryptoFed blockchain, a sister chain to the EOS protocol.
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In this note, the company indicated that “Form 10 will automatically take effect in 60 days. Which subjects CryptoFed to the SEC’s periodic reporting requirements. Makes CryptoFed the first legally recognized DAO in EE. UU. As well as the first public DAO in the world ».