The U.S. Securities and Exchange Commission (SEC) has once again wielded its authority in its bid to sanitise the crypto industry from fraudulent activities completely. In a new move, the agency has ordered fund manager of CoinAlpha Advisors LLC to pay a $50,000 in fine after it was discovered that the company offered investors unregistered securities.
In a statement that was released by the SEC and published on Friday, CoinAlpha was reported to have formed a fund in 2017 with the sole objective of investing in digital assets. To this end, the company was believed to have raised over $600,000 having reached out to investors.
And although the agency noted that the company filed for what it calls a “Notice of Exempt Offering of Securities,” the SEC made it categorically clear that the company wasn’t eligible for an exemption. More so, the company failed to register with the SEC. Consequently, the regulator stated the company breached the law having offered investors’ unregistered securities.
Speaking further, the commission also remarked that the company did not run an intensive Know your customers’ procedures even though the company had hired the services of a third party to check for accreditation status after the regulator contacted it.
In a statement contained in the order, the SEC noted that the company refunded all fees to investors after been contacted by the SEC.
“A total of 22 investors invested a total of $608,491 in the Fund. In October 2018, after being contacted by the Commission staff concerning the issues herein, CoinAlpha unwound the Fund, pursuant to the authority granted in the Fund’s Limited Partnership Agreement.”
Also the commission highlighted that CoinAlpha cooperated with the SEC, and that the fine imposed by the SEC on the agency is based on the agreement reached with the company.
So far, the actions taking by the SEC against CoinAlpha involves sanctions that prevent the company from violating securities act in the future as well as a $50,000 fine on top refunds to investors. According to the filing, the company never denied or admitted all of the allegations levelled against it by the SEC.