The sham crypto firm Longfin was hammered by the SEC and the DOJ for fraud after allegedly inflating its revenue by $66 million to get listed on Nasdaq. | Source: Shutterstock
Bitcoin in Crosshairs as SEC & DOJ Drop Hammer on Crypto Firm Longfin
Specifically, Longfin’s CEO, Venkata Meenavalli, is accused of inflating the company’s revenue by $66 million in order to fraudulently secure a listing on the Nasdaq in 2017.
Prosecutors Say Longfin Cooked the Books
The Securities and Exchange Commission also accused Longfin executives of insider trading, saying they illegally sold $33 million of stock in unregistered transactions.
While the screaming headlines suggest that the Longfin fraud is tied to bitcoin, in reality, the company has a tangential relationship to the crypto industry.
Longfin Pivoted to Crypto During Bitcoin Bull Market
Longfin was a fintech firm that went public in December 2017. In 2018, Longfin opportunistically pivoted to the crypto space amid the bitcoin bull market. The transition caused the company’s stock to spike 2,600% amid the bitcoin boom of the time.
In April 2018, a federal judge froze $27 million in assets owned by Longfin amid accusations of insider trading. Seven months later, the company shut down. At the time, the company’s CEO insisted that he had done nothing wrong (video below).
Because bitcoin mania was in full swing at the time,