Sergey Grybniak, founder of blockchain marketplace Opporty International, has pushed back against key claims included in a Securities and Exchange Commission (SEC) legal complaint against him and his company.
The case in question surfaced on Jan. 21 when the SEC filed a complaint in court accusing Grybniak and Opporty International of allegedly conducting an initial coin offering (ICO) of unregistered digital asset securities.
From Sep. 2017 to Oct. 2018, the filing said, Opporty raised $600,000 from nearly 200 investors in an unregistered ICO of its "OPP Tokens." During the process, the firm allegedly engaged in deceptive conduct including falsely claiming that the ICO was “SEC regulated” and misappropriating third-party content without approval.
In an open letter published on Tuesday, Grybniak claimed that statements made by the SEC were “grossly overstated” and “untruthful,” and would set an unfavorable precedent for the entire industry.
“This case is intended to create a legal precedent for integrated offering Reg D and Reg S, which was popular at the time, and was used by many projects,” Grybniak said. “If this precedent is established, it will have an impact on the entire industry, because it will be used against many projects under similar conditions. This could potentially lead to bankruptcy for many promising companies, including ours.”
Grybniak argued that the SEC missed key facts about its ICO. Specifically, he said, the complaint did not mention Regulation S, which “does not require foreign investors to comply with the rules of being an accredited investor for a domestic Regulation D offering.”
He claimed that of their 194 investors, 6 are accredited investors from the U.S. and the rest are foreign investors exempt from Regulation D.
Grybniak also pushed back on the SEC’s narrative that he or his companies were responsible for the alleged wrongdoing.
“The legal framework from this token sale was not designed by me personally, or my companies,” he said. “We hired an independent professional law firm to prepare our offering materials, and they advised us to proceed as we did.”
Moreover, the SEC filing claimed that Grybniak received $13,600 from the token sale and his other company, Clever Solution, unjustly obtained $147,000. But Grybniak said that over 90% of the funds raised were depleted by autumn 2018 and he has been using personal funds as well as Clever Solution’s resources to support project development efforts at Opporty International.
In the letter, Grybniak asked the community to provide financial assistance to him and his company to move forward with the case.
“We are requesting financial assistance from the community to help us with this case. We are in a weak position because the money we raised was depleted more than a year ago,” he wrote.