The Ontario Securities Commission (OSC), a regulatory agency, recently brought up an allegation against Troy Richard James Hogg and his companies on September 30 regarding selling crypto securities tokens that acquired US$51 million from investors.
The OSC report said that Hogg, an Ontario citizen, and his firms, Cryptobontix Inc., Arbitrade Exchange Inc., and Arbitrade Ltd.’ advertising and selling a crypto-asset known as Dignity token to investors all over the world since May 2017 up until June 2019.
With the use of fraudulent and misleading assertions in advertising, Hogg and his companies misled investors. One of these false assertions was that the value of Dignity tokens has support by gold bullion.
Fake promises made to investors, Hogg and his companies, Arbitrade Ltd., T.J.L. Property Management Inc., and Gables Holdings Inc., misappropriated large sums of investor money for their personal use.
However, the OSC froze assets that were getting by with stolen money from investor funds in 2021. The Custodian of the Ontario Superior Court of Justice was granted custody of funds received from the sales of properties.
Generating Profits From Security Tokens Illegally
As per the recent boom in cryptocurrencies and their mass popularity, The frequency of crypto scams has also increased. The Corporation charge by the Securities and Exchange Commission on Sep 28 for selling Hydro tokens without registering them.
SEC’s report, Kane and Hydrogen, a financial technology firm, created its Hydro token in Jan 2018 and distributed it publicly.
Related: SEC Files Lawsuit Against Crypto Influencer
Including an “airdrop,” essentially giving Hydro away to the public, bounty programs paid people the token in exchange for promoting it, employee compensation, and direct sales on crypto asset trading platforms.
SEC claims that after distributing the token in these ways, Kane and Hydrogen contracted with Moonwalkers. In October 2018, it use its customized trading software or “bot” to create the false appearance of active market activity for Hydro before profitably selling Hydro into that artificially inflated market on Hydrogen’s behalf.
For violating securities laws, the SEC filed lawsuits against Hydrogen, its former CEO Kane, and Moonwalkers CEO Ostern. The lawsuits ask for permanent injunctive relief, conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties.
Moonwalkers CEO Ostern agreed to pay $5118 in prejudgment interest and $36,750 in disgorgement without admitting or disputing the accusations.