The US Securities and Exchange Commission has settled a fraud case with Boon.Tech, a blockchain-powered jobs marketplace and its founder and CEO, Rajesh Pavithran. The securities commission had charged the company with fraud and securities violations connected with its $5 million initial coin offering (ICO). Boon.Tech conducted its ICO from November 2017 to January 2018, raising $5 million from over 1,500 investors, some of whom were US citizens.
Boon.Tech raised $5 million in the ICO.
Boon.Tech conducted its ICO from November 2017 to January 2018, raising $5 million from over 1,500 investors, some of whom were US citizens. The blockchain company claimed that it would channel the funds towards developing a jobs marketplace connecting employers with freelancers. The platform would be powered by blockchain technology and the native Boon Coins. The Securities Exchange Commission alleged that the Boon Coins were sold as investment contracts and therefore qualified as securities. Additionally, the blockchain company lied to investors, claiming that Boon Coins were stable and not subject to market volatility as they were hedged with the US dollar. However, the platform was built on the same public blockchain as its competitors, the SEC stated.
The blockchain company agreed to pay $5 million in disgorgement.
Boon.Tech and Pavithran agreed on a settlement with the US SEC, consenting to disgorge the $5 million it raised in the ICO. Moreover, without admitting or denying the SEC charges, the company agreed to pay $600,000 in prejudgment interest. Pavithran will also pay a $150,000 penalty and be barred from serving as a public company director. The chief of the SEC’s Cyber Unit, Kristina Littman, cautioned ICO issuers against deceiving investors about their tokens’ value. She further stated that investors are entitled to truthful disclosures from issuers of securities, whether digital or otherwise. Pavithran and Boon.Tech defrauded investors by convincing them to fund this endeavor based on the allure of innovation that simply did not exist, she added.