In a move that reverberates throughout the world of cryptocurrencies and digital investment, the United States Securities and Exchange Commission (SEC) has taken assertive legal measures against Titan Global Management, a company that has been offering cryptocurrency operations to investors. The SEC’s action marks a significant milestone in its efforts to regulate and safeguard investors in the rapidly growing and often contentious cryptocurrency space.
The SEC has initiated legal proceedings against Titan Global Management, alleging that the New York-based company has been involved in illegal and deceptive activities related to the offering of cryptocurrency operations.
“According to the SEC, the New York-based company made misleading claims on its website that were based on ‘hypothetical returns,’ violating the SEC’s amended marketing rule from December 2020.” [1]
According to the official SEC statement, Titan Global is accused of several violations, starting with that during, “a period ranging from August 2021 to October 2022, Titan, which offers multiple complex strategies to retail investors through its mobile trading app, made misleading statements on its website regarding hypothetical performance, including by advertising “annualized” performance results as high as 2,700 percent for its Titan Crypto strategy..” [2]
As per the ruling, Titan’s advertising was deceptive because it omitted key details, such as the assumption underlying the hypothetical performance predictions that the strategy’s performance in the first three weeks would continue for an entire year.
Furthermore, the court ruled that Titan violated the Commission’s marketing rule by promoting fictitious performance indicators without adopting and implementing the necessary policies and processes or taking any other action required by the rule, which was amended in December 2020.
In response to these findings, Osman Nawaz, the head of the SEC’s Division of Enforcement’s Asset Management Unit, stated,
“Titan’s advertisements and disclosures painted a misleading picture of certain of its strategies for investors. This action serves as a warning for all advisers to ensure compliance” [3]
Consequently, the SEC took regulatory actions against Titan’s team and reached an agreement in which the company committed to certain terms.
Therefore, Titan will have to pay over $192,000 in client reimbursements. Additionally, the company will be fined $850,000, and ultimately, Titan will be subject to a “Cease and Desist” order to halt public operations.
Thus, according to the SEC, the company allegedly promised disproportionate and guaranteed returns to its investors, constituting a violation of securities laws and an attempt to attract fraudulent investments. The Commission has also noted that the company has not fulfilled the necessary disclosure requirements to ensure that investors are adequately informed about the risks associated with cryptocurrency operations.
The SEC’s action against Titan Global Management underscores the growing concern of regulatory authorities about illicit activities in the cryptocurrency space. Furthermore, it emphasizes the importance for investors to conduct thorough due diligence before engaging in cryptocurrency-related operations.
Note: To read the SEC’s official statement, click here: https://www.sec.gov/news/press-release/2023-153
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[1]https://es.cointelegraph.com/news/sec-charges-crypto-investment-manager-with-misleading-advertising-custody-claims?utm_source=Telegram&utm_medium=social
[2] https://www.sec.gov/news/press-release/2023-153
[3] https://www.sec.gov/news/press-release/2023-153
