In the eyes of the U.S. Securities and Exchange Commission (SEC), in most cases, an initial coin offering (ICO) is synonymous with fraud. The financial regulator has gone on the offensive in the cryptocurrency space, calling out an endless number of companies it asserts illegally offered securities to investors.
Kik, Telegram and plenty more have felt the regulator’s wrath, and one of the more recent cases centers on Opporty, a blockchain marketplace. It is now being charged by the SEC for offering a fraudulent ICO tied to the sale of its OPP tokens. As has been seen in many of the cases, the allegations are false, according to the company’s founders, and allowing the case to move forward will “affect the entire industry.”
Opporty’s founder, Sergey Grybniak, penned a blog post in response to the SEC’s lawsuit against the company. The commission’s case targets Opporty International and Clever Solution Inc., both of which are owned by Grybniak, and the $600,000 that was raised by Opporty’s ICO.
Grybniak asserts in his response that the SEC’s allegations are false and “grossly overstated,” and adds, “This case is intended to create a legal precedent for integrated offering Reg D and Reg S, which was popular at the time, and was used by many projects. If this precedent is established, it will have an impact on the entire industry, because it will be used against many projects under similar conditions. This could potentially lead to bankruptcy for many promising companies, including ours.”
To support his claims that the SEC is incorrect in its attack, Grybniak points out that, according to SEC Regulation S, foreign investors are not required to comply with regulations of having to be an accredited investor to participate in a U.S.-based Regulation D offering. He adds that 188 of the 194 investors who purchased OPP tokens are foreign and, therefore, the ICO was exempt.
As far as the SEC’s assertion that Grybniak took money and that Clever Solution was given $147,000 from the sale, the founder asserts that this couldn’t be further from the truth. He explains that he didn’t receive the $13,600 the SEC thinks he did, and that he has been using “personal funds” and Clever resources to continue development since Opporty ran out of money in the fall of 2018.
Grybniak adds, “This case is intended to create a legal precedent for integrated offering Reg D and Reg S, which was popular at the time, and was used by many projects. If this precedent is established, it will have an impact on the entire industry, because it will be used against many projects under similar conditions. This could potentially lead to bankruptcy for many promising companies, including ours.”
To fight the SEC, which he describes as having “virtually unlimited resources,” Grybniak wants assistance from the blockchain community to help pay for the legal costs. Financial support can be given through a GoFundMe page that has been created, but other type of input is needed, as well, including legal services and advice. Grybniak adds, “We are also open to conversations with counsels who advised other projects and perceived the same legal framework, to disclose more details of our case in private and under privilege.”
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