Porn coin Fantasy Market CEO facing fraud charges settles with the SEC

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Entrepreneur Jonathan Lucas had a bright idea. He sought to capitalize on the popularity of cryptocurrency to further his endeavors in the world of live-streamed porno and went out looking for backers. Behind the Fantasy Market porn portal, Lucas began offering FMtokens in an initial coin offering (ICO) that could be used for purchasing live-streamed sex and he set out to raise up to $25 million. However, the entire endeavor appears to have been nothing more than a fraud and Lucas is now going to have to respond for his misguided actions.

The New York Post indicates that it has been following his antics since last year, even inviting him to an interview to explain how his ICO would work. However, the most Lucas could muster was a verbal dance routine as he wasn’t able to properly respond to the questions. However, he still managed to attract some investors and four of them came forward last week to say that Lucas had disappeared with their money.

Lucas didn’t completely disappear from sight; he apparently just quit dealing with everyone. He has been seen in chat rooms and social media and, on one occasion, stated that he had been able to pick up just over $4 million in investment money. However, interacting with his investors appeared to be an activity he wanted to avoid.

The Securities and Exchange Commission (SEC) got involved and charged Lucas with a fraudulent ICO scheme. Its own investigation determined that the wayward businessman may have only collected about $63,000 from over 100 investors and he was looking at being held on several violations of both the Securities Exchange Act and the Securities Act.

The commission caught up with Lucas and he copped a deal to avoid having to answer for his crimes in court. According to the SEC’s statement, he agreed to pay a civil fine of $15,000 and has been banned from being able to serve as an officer or director for any company for five years. He has also been given a five-year “conduct-based injunction prohibiting Lucas from participating in any unregistered offering of securities, digital or otherwise, except for securities transactions for his own personal account.” The SEC adds that, following the publicity surrounding the fraudulent ICO, Lucas had already agreed to return to the investors their funds.