U.S. Securities and Exchange Commission (SEC) on Wednesday halted Wyoming-based American CryptoFed DAO from registering its digital tokens.
The American CryptoFed DAO
The American CryptoFed DAO was established by mSHIFT Inc. on July 1st 2021, a natural evolution from American CryptoFed Inc.
On July 1, 2021, State of Wyoming approved American CryptoFED DAO, the newly formed Decentralized Autonomous Organization as a legal entity as per the revised company law.
The American CryptoFed DAO describes itself as 2-token economy – Ducat, a stablecoin; and Locke, a governance token.
Read Also: American CryptoFed DAO To Become Public
American CryptoFed Allegadely Misleads SEC In Registration Form
The U.S. SEC on Wednesday stopped registration for the two digital tokens offered by American Cryptofed DAO LLC, accusing the company of providing misleading information to investors in regulatory filings.
The U.S. Securities and Exchange Commission (SEC) said in a statement that on Sept. 16, 2021, American CryptoFed filed a materially deficient and misleading registration form known as a Form 10, which purported to register two digital tokens issued by American CryptoFed, called the “Ducat” and “Locke” tokens, as equity securities.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said:
“Issuers attempting to raise money from the public must provide the information necessary for investors to make informed decisions. We allege American CryptoFed made materially misleading statements and failed to provide legally required information in its registration form.”
The SEC clearly mentioned that the Form 10 filed by the DAO failed to contain certain required information about the two tokens as well as about American CryptoFed’s business, management, and financial condition, including audited financial statements.