US regulators just filed a complaint against a crypto executive who allegedly carried out a $16 million fraudulent securities offering.
The U.S. Securities and Exchange Commission (SEC) says that GIBF GP Inc. and Monsoon Blockchain Corporation founder Donald Basile offered investors Simple Agreements for Future Tokens (SAFTs) that would supposedly allow them to receive a crypto asset called Bitcoin Latinum, BTCL or LTNM once a particular milestone is satisfied.
“[T]he SAFT defined Milestone to mean ‘the newly forked Bitcoin Network is operational after a successful Hard Fork with Token functionality as determined by [GIBF] in its sole discretion’.”
The securities watchdog says that Basile claimed that LTNM is the world’s first insured digital asset with up to $1 billion coverage from an international insurance broker and risk adviser despite that no insurance company ever issued a policy for the cryptocurrency.
Basile is also accused of falsely stating that LTNM is backed by a basket of digital assets when the token had no asset backing at all.
He said that at least 80% of the SAFT offering proceeds would be spent to support the development of LTNM or go into an underlying fund, but this allegedly did not happen. The SEC says that Basile instead used the accounts containing investor funds for his personal benefit.
Basile allegedly used $4.1 million to purchase a condominium in Miami, Florida; $2.8 million for a house in Park City, Utah and $1.4 million to pay his personal American Express card. He also bought a $160,000 horse for his daughter.
“Ultimately, after selling SAFTs to hundreds of investors, Basile stopped promoting LTNM; LTNM is now valueless, and many investors have lost their entire investment.”
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This post Crypto Founder Allegedly Masterminds $16,000,000 ‘Insured’ Coin Offering, Splurges on Luxury Homes and Horse: SEC may be modified as updates unfold.
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