New Jersey Claims Pocketinns Blockchain Firm Sold $400,000 In Unregistered PINNS Securities
- Pockettins might have to face charges for selling unregistered securities
- Initial Coin Offerings in the United States are considered unregistered securities offerings
New Jersey is accusing a blockchain rental marketplace that sold $400,000 worth of unregistered securities. This is according to a complaint that was filled a few days ago and that involves the firm Pocketinns, Inc. and the president of the company Saravajnya Mada.
Company Accused Of Selling Unregistered Securities
Pockettins is being accused of selling $410,000 in unregistered securities using a virtual currency called PINNS Tokens. These tokens were sold during an Initial Coin Offering (ICO) that was held on January 2018 when the market was purchasing tokens from ICO‘s.
According to Cointelegraph, neither the company nor the owner were registered with the state’s Bureau of Securities. As per the report, 217 investors purchased these tokens violating New Jersey’s securities laws. Just 11 of these investors that provided information about their credentials. The company wanted to exchange the tokens for Ether (ETH) that was worth over $700 at that time.
The goal of the firm was to gather around $46 million selling 30 million of PINNS Tokens for a price of over $1.5 per coin.
About this issue, Paul Rodríguez, acting director of the Division of Consumer Affairs, commented:
“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.”
Mada could now face penalties for selling unregistered securities and violating the state’s securities laws. The firm would also have to return investors their funds back.
Back in 2017 and the beginning of 2018, the number of Initial Coin Offerings grew exponentially. There were many investors purchasing digital assets due to the bull market in the space and ICO's tried to gather funds through the sale of tokens. Most of these ICOs are currently dead or have disappeared after some months.
It is also worth mentioning that the U.S. Securities and Exchange Commission (SEC) considers most of the ICO's unregistered securities. The SEC has also issued enforcement actions against other ICO's in the market.