Crypto Firm Longfin Corp to Settle SEC Penalties for $6.8M

Wilfred Michael 

Wilfred Michael

News reporter

01 October 2019,
08:49
Crypto Firm Longfin Corp to Settle SEC Penalties for $6.8M

A federal court in New York has brought to an end a case initially filed in June by the United States Securities and Exchange Commission against crypto firm Longfin Corp. and its founder Venkata S. Meenavalli.

As per an SEC release published Monday, Honorable Denise L. Cote of the U.S. District Court for the Southern District of New York ruled that Longfin and its founder were guilty as charged by the regulatory agency.

The SEC had alleged, among other things that Longfin manipulated their revenue numbers and also conducted a fraudulent public offering while presenting false information to the SEC.

For instance, the company had allegedly represented in their filings with the SEC that “the company was principally managed and operated in the U.S. when, in fact, the company's operations, assets, and management remained offshore.”

Additionally, Longfin Corp in a bid to qualify for a listing on Nasdaq, allegedly “distributed over 400,000 free shares to insiders and affiliates and misrepresented the number of qualifying shareholders and shares sold in the offering.”

The SEC's complaint also mentioned that Longfin and Meenavalli recorded more than $66 million in fictitious revenue from sham commodities transactions, amounting to more than 90% of Longfin's total 2017 reported revenue.

It is for these offenses and others that Honorable Denise L. Cote ordered the accused to pay roughly $6,755,848 in penalties and disgorgement.

In an earlier report, the SEC also ordered blockchain company, Block.one to pay a $24 million fine for conducting an unregistered initial coin offering between 2017 and 2018.

 

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