The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it has taken action against two cryptocurrency firms. Both mark the “first-ever” action of their kind by the Commission. One is against a firm which claims to offer the “first regulated crypto asset fund in the United States” and the other is against an “ICO Superstore.”
SEC’s Action Against Crypto Asset Management
The firm, located in La Jolla, California, focuses primarily on managing investment portfolios of cryptocurrency and related assets. The Commission elaborated:
The SEC entered an order finding that Crypto Asset Management LP (CAM) offered a fund that operated as an unregistered investment company while falsely marketing it as the ‘first regulated crypto asset fund in the United States’.
According to the order against CAM and its sole principal, Timothy Enneking, the firm raised more than $3.6 million over a four-month period in late 2017 “while falsely claiming that the fund was regulated by the SEC and had filed a registration statement with the agency.” The Commission clarified:
By engaging in an unregistered non-exempt public offering and investing more than 40 percent of the fund’s assets in digital asset securities, CAM caused the fund to operate as an unregistered investment company.
The firm “ceased its public offering and offered buy backs to affected investors” after being contacted by the Commission. “CAM and Enneking agreed to the SEC’s cease-and-desist order and censure without admitting or denying the findings against them,