SEC Strikes Against Yet Another Unregistered ICO to Recover $147,000 ‘Ill-Gotten’ Gains

  • In January, U.S. SEC has gone after 3 Initial Coin Offerings (ICO)
  • SEC files complaint against Opporty and its sole owner Sergii Grybniak for raising $600k in unregistered securities sale of “OPP Tokens”

The U.S. Securities and Exchange Commission is taking an action against blockchain firm Opporty International and its founder Sergii “Sergey” Grybniak for an unregistered Initial Coin Offering (ICO).

This came on the heels of the suit filed by the SEC against Boaz Manor, business partner Edith Pardo, and two companies regarding an allegedly fraudulent ICO that raised $30 million last week. Earlier this month, the regulator was seeking more than $16 million in another case of securities violations.

Falsely claiming to be “SEC-regulated”

In a complaint filed on Jan. 21, the SEC alleges that Opporty and its sole owner Grybniak raised about $600,000 from about 200 investors in the US and elsewhere by selling unregistered securities “OPP Tokens” during 2017-2018.

The ICO also falsely claimed that it was “SEC-regulated” and “SEC-compliant,” when it didn’t register with the regulator which would have disclosed “sufficient, accurate information relating to the ICO” to the potential investors.

OPP tokens were sold via purchase tokens called “simple agreements for future tokens” (SAFTs), once touted as a way to avoid regulatory actions, as such “constituted investment contracts and, thus, securities.”

Making material misrepresentations & omissions

Grybniak, the complaint alleges pitched Opporty,

“as a place where small businesses could list their services and products, use blockchain smart contracts to enter into agreements with customers, and transact business using OPP Tokens.”

He also misled investors about the sale by,

“making material misrepresentations and omissions to investors and engaging in other deceptive conduct during the offering.”

Opporty allegedly claimed to have 17 million small US businesses in its database and over 6,000 “verified providers” wanting to do business with it. But there was no such willingness from these providers and they weren’t contributing to the platform. Moreover, the millions of businesses merely purchased a database of an entity and individual profiles from a third-party vendor, a fact not disclosed to OPP token purchasers.

A suit to have the “ill-gotten” gains returned

The SEC is seeking to have Opporty returning the “ill-gotten” gains, approximately $147,000 from the ICO, pay civil money penalties, refrain from future issuance of securities, and permanently barring Grybniak from serving as a director of any public company.

The complaint also names Clever Solution Inc., which “has no employees and is an alter ego of Grybniak,” as a relief defendant. The case is currently heard at the New York Eastern District court.

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