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According to the complaint, the two companies falsely claimed they had $10 billion in gold bullion backing their cryptocurrency.

According to a press release, the U.S. Securities and Exchange Commission filed charges against Bermuda’s Arbitrade Ltd and Canada’s Cryptobontix for allegedly running a pump-and-dump scheme that involved a crypto asset called Dignity or DIG.

The complaint alleges that Arbitrade falsely claimed that between May 2018 to January 2019, Arbitrade had received $10 billion in gold bullion title.

Additionally, Arbitrade stated that it planned to back every DIG token that was issued and sold to investors using $1 of this gold.

The SEC says that the gold acquisition transaction was a ruse by the company to increase demand for DIG. It allowed the principals of the company to sell DIG at an inflated price to at least $36.8million, including to U.S investors.

The SEC has charged the defendants with violating federal securities laws’ antifraud and securities registration provisions.

Permanent injunctive relief, disgorgement plus interest and civil penalties are all sought by the complaint against all defendants. The individual defendants also face officer-and director bars.

The post SEC have Accused Arbitrade Ltd and Cryptobontix For Pump and Dump Scheme’s first appeared on The Daily Encrypt.


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Angie Byrd