The United States Securities and Exchange Commission (SEC) has filed charges against Kristijan Krstic, the founder of Start Options and Bitcoiin2Gen, two crypto-related schemes that reportedly raised $11 million from retail investors during the peak of the 2017 ICO mania.
The regulator also filed charges against a certain John DeMarr, alleging that he promoted the investment schemes to U.S customers, and then joined Krstic in misappropriating funds amassed from what constituted an unregistered securities sale.
Between late December 2017 and April 2018, the accused persons first allegedly promoted the Start Options’ trading platform, which they claimed was for digital asset trading and mining. They also falsely told unsuspecting investors that Start Options was “the largest Bitcoin exchange in euro volume and liquidity” and “consistently rated the best and most secure Bitcoin exchange by independent news media.”
Krstic and DeMarr also masterminded the sale of B2G tokens, in an initial coin offering (ICO) that raised $11 million, claiming that the tokens would be listed for trading on crypto-exchange once the Bitcoiin2Gen platform launched in April 2018. The launch never happened.
Other false claims about the B2G token ICO include that the token would first launch on the Ethereum blockchain and that funds from the offering would develop a coin that mineable. The SEC says that these claims about the B2G tokens were false and that ‘Bitcoiin2Gen was a sham.’
Today’s filing also includes a notable difference from other SEC enforcement actions against ICO-projects. The regulator charged another individual, Robin Enos, alleging that the content creator “drafted fraudulent promotional materials” in the full knowledge that it would be distributed to the investing public.
Meanwhile, the charges against Bitcoiin2Gen were almost inevitable. In February, the SEC fined American actor Steven Seagal for touting the coin and failing to disclose that he received financial compensation (both B2G tokens and cash) for the promotion.
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