SEC takes action against Chinese billionaire’s companies over $500M offerings

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The United States Securities and Exchange Commission (SEC) has charged three of Chinese billionaire Guo Wengui’s firms over an preliminary coin providing (ICO) and preliminary public providing (IPO) that fetched round $487 million mixed.

The notorious Wengui, also called Miles Kwok or Miles Guo, is an exiled Chinese businessman who presently resides in New York. Wengui is thought for his controversial political takes and his ties to Donald Trump confidant, Steve Bannon.

The SEC submitted a stop and desist order on Sept. 13, with the paperwork displaying that Guo’s firms have agreed to pay a settlement with the SEC inside 14 days.

The SEC outlined two unregistered securities choices from Guo’s corporations, with GTV Media Group, Saraca Media Group and Voice of Guo Media conducting an IPO between April 1 and June 2020. Saraca and Voice of Guo, dubbed the “G Entities,” additionally performed an ICO over the identical interval.

The ICO raised $34 million from buyers searching for publicity to the corporations’ G-Dollars — a digital forex the issuer claimed could possibly be exchanged for gold or fiat forex or used to buy items on the G Entities’ on-line platform.

The SEC discovered that the G Entities didn’t present buyers with data relating to how its purported digital asset and platform can be developed, including:

“The G Entities have yet to develop or distribute the digital assets sold in the Coin Offering or a platform that would allow users to transact with or sell digital assets.”

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Proceeds from the ICO have been commingling with the funds raised in its $453 million inventory providing that presupposed to distribute 10% of GTV’s widespread shares. The unregistered IPO attracted participation from 5,500 folks.

The corporations have agreed to pay $486.6 million in fines, prejudgment curiosity of $17.6 million and a civil penalty of $35 million mixed.