The U.S. Securities and Exchange Commission (SEC) has settled charges brought against Loci Inc. and its CEO John Wise in connection with an unregistered securities offering in which they were said to have made materially false and misleading statements in connection with the sale of digital asset securities. In a press release, the regulator said it had settled the charges in exchange for accepting a cease and desist order against the firm and its CEO, an undertaking to destroy the unregistered tokens still remaining, publication on company social media channels of the outcome, and a commitment not to participate in future digital asset securities offerings. The settlement also includes an officer and director bar to Wise, as well as a civil penalty of $7.6 million. As per the SEC’s charges, Loci offered an intellectual property search service through its InnVenn platform, for which it sold tokens known as LOCIcoin over a period from 2017-18. The sale raised $7.6 million, but was raised on misrepresentations, including on the firm’s revenue, number of employees, and the number of users of its platform. The order also found Wise to have misused funds in the amount of $38,163, used for covering personal expenses. While the token issue was found to legally constitute a security offering, this had not been registered by the company with the SEC in the required way. Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said the firm and Wise had misled investors to a significant extent in soliciting their unregistered securities tokens for sale. “Loci and its CEO misled investors regarding critical aspects of Loci’s business. Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.” Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.