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SEC reaches $10M settlement with crypto token issuers accused of fraud

The U.S. Securities and Exchange Commission (SEC) has settled charges with a cryptocurrency firm and its founders for allegedly operating an unregistered exchange and offering unregistered securities.

The firm, Bitqyck Inc., and its founders Bruce Bise and Sam Mendez­, defrauded investors in securities offerings of two crypto tokens - Bitqy and BitqyM, the SEC said Thursday.

The founders amassed over $13 million from more than 13,000 investors, the regulator said, adding: “Investors allegedly received $4.5 million for referring new investors to Bitqyck but collectively lost more than two-thirds of their investment” in Bitqyck Inc.

“We allege that the defendants took advantage of investors’ appetite for these investments and fraudulently raised millions of dollars by lying about their business,” said David Peavler, director of the SEC’s Fort Worth Regional Office.

All parties, therefore, have agreed to settle fines amounting to a little over $10 million. Bitqyck Inc. to pay a civil penalty of $8,375,617, while Bise and Mendez are to pay $890,254 and $850,022, respectively, per the announcement.