NextBlock Global Fined Over $500,000 As CEO Alex Tapscott Gets A $25,000 Penalty From The SEC
NextBlock Global Ltd. Fined $520,000 USD As The CEO, Alex Tapscott Gets A $25,000 Penalty From The SEC
The Securities Exchange Commission (SEC) has issued NextBlock, a crypto community building platform, a cease and desist order from operating in the country. The five-page administrative proceedings from the SEC confirmed that NextBlock Global Ltd. did not follow the Securities Act of 1933 (Securities Act) hence the cease and desist proceedings.
1NextBlock Global Ltd. fined $700,000 CAD (~520,000 USD)
The Canadian based corporation is accused of not having any records of registering the company with the SEC and further defrauding the investors by falsifying the advisory board personal.
Violations By NextBlock Global Limited
The company faces penalties for the violation of securities law acts and not having registered with the SEC despite functioning under the regulations of the commission. The report by the SEC further accused the Canadian company of violating the Securities Act law Section 17(a) (2) which;
“Prohibits any person in the offer or sale of securities from obtaining money or property by means of any untrue statement of material fact or any omission to state a material fact necessary in order to make the statements made not misleading.”
Another issue with NextBlock is the falsification of their advisory board members. The company places four ‘prominent blockchain figures” as part of their advisory team while they are not part of the team.
Alex Tapscott, the CEO, owner, director and co-founder of the NextBlock Global Ltd. is also found guilty of violating the securities act. Tapscott is held responsible for his fundraising efforts in the private placement of convertible debentures offered by the company. The leader of the company further held offered falsified information to the prospective investors which may have led to investment fraud.
Alex Tapscott, CEO of NextBlock Ltd. fined $25,000 USD (Medium)
The company is facing an administrative penalty of $520,000 USD ($700,000 CAD) paid to the Ontario Securities Commission (OSC) after the authorities reached a settlement with the blockchain based company. The fee is an acknowledgment of the responsibility the company holds in the violations of the Securities Act. Tapscott on his part will pay a civil money penalty of $25,000 USD to the Securities Exchange Commission for his role in the falsification of data.
The company is liquidating after it failed to raise the second round of funding owing to the news of its misconduct and violation of Securities act. The company opened in mid-2017 raising $20 million CAD (~16 million USD) in convertible debentures. Of the total investment collected, $2.4 million was raised from US investors, hence the role of the SEC. The investors were offered digital assets in exchange but they have since tanked leaving the company with no option but to liquidate the company.