Veritaseum (VERI) slumped 60% in the past 24-hour after The United States Securities and Exchange Commission (SEC) has filed an emergency lawsuit.
Big Blow for VERI
The explosion of the crypto space has led to a lot of tech innovation as companies have resorted to distributed tokens in the form of an Initial Coin Offering in order to raise capital. It has proven to be a highly effective method of raising capital, and many companies have managed to get off the ground using an ICO. However, it goes without saying that the presence of such a tool can also be misused.
Over the years, plenty of entities have conducted ICOs for bogus purposes and managed to dupe people for millions of dollars. However, the Securities and Exchange Commission has now taken a much more active role in this sphere and in a new development, it is now attempting to go after the mildly popular Veritaseum ICO.
It has emerged that the SEC has now moved a Brooklyn court in order for an emergency lawsuit to ensure that the people behind Veritaseum are not able to access the proceeds from the ICO. The SEC claims that the company, as well as its founder Reginald Middleton, had sold the cryptocurrency Veritaseum by telling investors that it was actually software or a gift card. However, that claim is apparently fraudulent, according to SEC, and goes against the regulations with regards to an ICO.
The company managed to raise $14.8 million, but now the SEC is trying to ensure that the Veritaseum and its founder do not have access to those funds. The ICO took place back in 2017 and over the course of the next two years, raised a significant amount of money. At this point in time, only $8 million is left. It goes without saying that as soon as the news about the SEC action hit the news wires, investors started dumping the token en masse and its price crashed significantly.
Veritaseum (VERI) has fallen all the way from $9.40 to $4.50 in the past 24-hours.
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