New Jersey Sues Blockchain Firm for Unregistered $46 Million ICO

PocketinnsNew Jersey's securities regulator hits hard against a blockchain firm for selling unregistered securities through an initial coin offering (ICO).

As regulators pine over the safety of Libra, recent crypto-related crimes are sure to keep them on edge. New Jersey Attorney General Gurbir Grewal filed a lawsuit on Wednesday against Princeton-based company, Pocketinns Inc.

Pocketinns and their president, Sarvajnya Mada, allegedly failed to register with the Bureau of Securities before selling $400,000 of unregistered securities. Mada sold the securities in January of 2018 in the form of a cryptocurrency called PINNS tokens.

Of the 217 investors who purchased the tokens, only 11 verified themselves as accredited investors.

Paul Rodríguez, Acting Director of the Division of Consumer Affairs, explains the issue:

By failing to take reasonable steps to verify that purchasers were accredited investors capable of bearing the increased risks associated with unregistered securities, the defendants violated the law and exposed investors to financial losses that could have been devastating.

Attorney General Grewal hammered home the point:

The lawsuit we filed makes it clear that individuals selling cryptocurrency-related investment products in New Jersey must comply with the law or face serious consequences.

Pocketinns Case Joins Crypto Crimes

News of this violation comes just days after masked thieves attempted to steal a crypto ATM in the UK. The robbers tried to pull the ATM away with their car but ultimately failed.

Add on to this, the recent news of Japanese crypto exchange Bitpoint losing over $20 million of crypto holdings from over 50,000 customers. It appears as the world of crypto could be dangerous.

Its not a stretch to see why so many regulators are taking the ax to Libra, Facebooks developing new cryptocurrency.

Regulators Critical Of Libra, Cryptocurrency

Steven Mnuchin, the United States Secretary of the Treasury, recently said that cryptocurrency is a national security issue. He added,

Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.

While cryptocurrency creates new vulnerabilities that need to be addressed, how does it compare to the current government-regulated monetary systems?

Crypto Crimes Pale in Comparison to Recent Banking Violations

Meanwhile, major institutions such as Deutsche Bank face FBI investigation for failing to comply ...

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Tags: Cryptocurrency, Regulatory agency, New Jersey, Paul Rodriguez, Attorney general, New Jersey Attorney General, Federal Bureau of Investigation, United States Secretary of the Treasury, Blockchain, Gurbir Grewal