SEC Sues Bitcoin Latinum
- The SEC sued a crypto executive over an alleged $16 million Bitcoin Latinum fraud scheme. - Regulators allege promoters falsely marketed the token as insured and misused investor funds. - The enforcement action highlights persistent SEC scrutiny around token marketing and investor protections (livebitcoinnews.com).
The Securities and Exchange Commission sued Bitcoin Latinum founder Donald Basile on April 17, alleging he used false promises to raise about $16 million from investors. (sec.gov) The agency said Basile and two companies he controlled, GIBF GP, Inc. and Monsoon Blockchain Corporation, sold “Simple Agreements for Future Tokens,” or SAFTs, from March through December 2021. Those contracts said investors would get Bitcoin Latinum, also called LTNM, later if a milestone was met. (sec.gov) A SAFT works like an advance sale: investors put up money now for tokens that may be delivered later. The SEC said Basile marketed those SAFTs as securities and told buyers Bitcoin Latinum was insured, asset-backed, and supported by a trust that did not exist. (sec.gov) The complaint says Basile described LTNM as “the world’s first insured digital asset” with up to $1 billion in coverage. The SEC said no insurer ever issued a policy covering the token or the offering. (sec.gov) Regulators also said Basile told investors that 80% or more of the offering proceeds would support the token’s value or go into an underlying fund. Instead, the SEC alleged he used millions of dollars for personal expenses, including real estate purchases, personal credit-card payments, and a $160,000 horse. (sec.gov) The case lands in a market where token issuers have long tried to sell crypto as safer than it is by invoking insurance, reserves, or backing. In this complaint, the SEC treated those claims as central to whether investors were misled about risk. (sec.gov) The SEC filed the case in the U.S. District Court for the Eastern District of New York and charged Basile under antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It also charged GIBF and Monsoon and asked the court for injunctions, disgorgement, civil penalties, and an officer-and-director bar against Basile. (sec.gov) Basile did not immediately respond to a request for comment, according to Morningstar’s Dow Jones report on April 17. The SEC’s complaint is an allegation, and the case now moves into federal court. (morningstar.com)
