The US Securities and Exchange Commission (SEC) ordered Crypto Asset Management LP (CAM) hedge fund’s work to be ceased immediately. The company's activities were found illegal. The regulator's press release says that the company violated registration requirements and at the same time provided hedge fund services, stating that it is the first regulated cryptocurrency fund in the country. For four months at the end of 2017, Crypto Asset Management succeeded in raising more than $3.6 million. The managing director of the company, Timothy Enneking, has stated that the fund is regulated by the U.S. SEC.
According to the Commission, in fact, the fund worked as an unregistered investment company. Immediately after the representatives of the department contacted Enneking, the firm curtailed its public offer and promised the investors that they would buy out their assets.
WHY IS IT IMPORTANT?
- The company will pay a penalty of $200,000 for violating the rules. In addition to CAM fund, the regulator also filed a case against an unregistered TokenLot broker-dealer. It will pay a fine of $471 thousand dollars.
- The company actually deceived its customers. The SEC release notes that investment advisers should make sure that the funds they represent meet all the requirements, including registration standards, and give full information to their clients.