US SEC Issues Order to Halt Registration of Two Digital Tokens

US SEC Issues Order to Halt Registration of Two Digital Tokens

The US Securities and Exchange Commission (SEC) announced on Wednesday that it had ordered Wyoming-based American Crypto Fed DAO LLC to halt the registration of two digital tokens as securities. According to the press release, the authority alleges that AmericanFed Crypto filed a ‘materially deficient and misleading registration form’ for the purpose.

The digital tokens set to be registered as equity securities were Ducat and Locke, the SEC noted. “The Enforcement Division alleges that the Form 10 failed to contain certain required information about the two tokens as well as about American CryptoFed’s business, management, and financial condition, including audited financial statements,” the watchdog noted.

In addition, the Enforcement Division claims that Form 10 contains materially misleading information, including inconsistencies about the status of the ‘Ducat’ and ‘Locke’ tokens as securities. “Also, statements relating to American CryptoFed’s purported intention to distribute (upon the effectiveness of its Form 10) its ‘Locke’ tokens to the public using a Form S-8, which is a registration form used for securities offered to employees through employee benefit plans, without disclosing that the ‘Locke’ tokens may not legally be distributed pursuant to a Form S-8,” the SEC added.

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That said, the US SEC had instructed to launch administrative proceedings to assess whether it’s necessary and appropriate to deny or suspend the effective date of the digital tokens’ registration. Both tokens’ registration is still pending a determination by an administrative law judge, the watchdog commented.

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