The U.S. Securities and Exchange Commission (SEC) has filed charges against Sergey Grybniak, the founder and sole owner of Opporty International, for allegedly running an unregistered Initial Coin Offering (ICO). The Opporty platform is a blockchain market place offering tokens to investors in the U.S.
SEC Drops The Hammer On Another Fraudulent ICO
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According to CrowdfundInsider, the SEC has filed charges against crypto entrepreneur Sergey Grybniak and his company Opporty International, Inc. for allegedly running a fraudulent ICO.
Grybniak and his company Opporty allegedly raised $600,000 from about 200 investors.
The Commission says the crypto entrepreneur and his company raised the sum through the sale of unregistered crypto tokens tagged ‘OPP Tokens’
According to the SEC, Grybniak roped investors in by falsely claiming that the ICO was SEC-compliant. The crypto entrepreneur also allegedly fabricated the actual and potential users of the Opporty business platform, per the SEC’s complaint. An excerpt from the SEC’s submission reads:
“On Opporty’s website and in numerous social media posts, Defendants touted that Opporty’s platform had more than 17 million small U.S. businesses in its business catalog or database, which created the false impression that the 17-million-plus companies in the catalog were real businesses eligible to conduct business on Opporty’s platform. In fact, Defendants had merely purchased a database of entity and individual profiles from a third-party vendor — a fact not disclosed to potential OPP Token purchasers.”
The SEC argued that only a few of the over 17 million purported businesses in the company’s catalog exist. The catalog included government agencies and officials that could not possibly be eligible users on Opporty’s platform, per the SEC complaint.
Grybniak and Opporty Facing Major SEC Violations
The Commission’s complaint also alleges that Grybniak and Opporty misappropriated third-party content without approval to mislead investors.
Another excerpt from the SEC’s complaint reads:
“On Opporty’s website and in numerous social media posts, Defendants deceptively misappropriated (at least) hundreds of reviews and ratings from a prominent customer review and ratings website, and content from the websites of its purported verified providers, and posted that information on Opporty’s website, thereby misleading investors to believe that this third-party content had been created on Opporty’s platform and/or by Opporty s “verified providers.”
Allegedly, Opporty had no users who created the reviews on its platform nor did any of the online customers and ratings company give authorization for their content to be used by the blockchain market place.
The complaint also states that the OPP tokens were sold via Simple Agreements For Future Tokens (SAFTs) purchase agreements, a popular strategy used by fraudulent ICOs to evade regulatory requirements.
Should the SEC win in court, Grybniak would be further banned from functioning as a director of a public company. The crypto entrepreneur and his company will have to return the gains from the ICO, pay civil penalties and never engage in the issuance of any form of securities, be they digital asset securities or otherwise.
SEC Not Relenting in War Against Illegal ICOs
The SEC’s case again Grybniak and Opporty is the latest in the regulators’ crypto-related enforcement actions.
Back in October 2019, Blockonomi reported that the SEC announced a $24 million settlement with the creator of the EOS blockchain ‘Block.one’. The blockchain giant was reported to have conducted an unregistered ICO.
The regulator was reported to have reached a $10 million settlement with Dallas-based crypto exchange Bitqyck back in August 2019. The crypto firm and its founders were accused of offering running an unregistered cryptocurrency platform.
Since 2019, Telegram has been having a running battle with the SEC over its $1.7 billion token sales of the company’s native crypto – Gram. The SEC claims the crypto falls under securities and that the company has not provided enough info to prove otherwise.
