US Regulator Fines and Halts Activities of Fraudulent Tomahawkcoin Issuer
The US Securities and Exchange Commission (SEC) recently uncovered another fraudulent ICO - the Tomahawkcoin. The chairperson of the company got fined severely by the US Commission for his fraudulent plans.
The company's head David T. Laurence released this Tomahawk coin through his company, Tomahawk Exploration LLC.
According to the SEC's reports, Laurence had launched the Tomahawkcoin in 2017 to raise funding for his oil wells exploration and to drill in California. The promotional materials of the project suggested that Tomahawk possessed the land leases for those drilling sites when it did not actually. Not only this, the White Paper of the ICO depicted Laurence with a clean background by hiding his prior criminal records concerning his role in fraudulent securities offerings. The white paper also claimed that the investors could convert their Tomahawkcoin tokens into equity shares. Unfortunately, Tomahawkcoin Company failed to raise funds, but still, the company issued tokens to its investors through a bounty program in exchange for online promotional services.
Highlighting the issues of safety of the Investors, Roberts A Cohen, chief of the SEC's cyber unit commented on the case saying "Investors should be alert of risks of old-school frauds like oils and gas schemes masquerading as innovative blockchain based ICO's."
In 1993, Laurance was imprisoned for mail fraud and for providing incorrect information to the SEC, and for cheating investors in penny stock according to the SEC reports. Even though Laurence had previous records for security fraud and imprisonment, he again "Violated the registration & antifraud provisions of federal securities." SEC banned Laurence from working as a director under the officer bar, or even as a trader under the penny stock bar permanently and imposed a fine of $30,000 on him.
A recent study has shown that ICO exit scams have cost investors more than 100 million dollars. Therefore in May, a mock ICO was launched by SEC, for creating awareness among people about the signs of a scam ICO. With the increase in cases of ICO scams, the SEC published a report warning investors against fraudulent ICOs. The agency also encouraged the investors to investigate and know the people in the ICO teams in which they are planning to invest.
SEC banned Laurence from working as a director under the officer bar, or even as a trader under the penny stock bar permanently and imposed a fine of $30,000 on him.
A recent study by ICO advisory firm Statis Group found out that over 70 percent of ICO funding (by $ volume) up-to-date went on to be utilized for authentic blockchain projects, whereas over 80 percent of projects (by # share) were identified as scams.