The US SEC has reached an agreement with the CEO of the financial technology company Longfin in a case of fraud.

Every day there is news about the Securities and Exchange Commission (SEC) of the United States. For example, on Saturday, January 4th, 2020, people were talking about the conflict between this agency and Telegram Group over the illegal issuance of assets made by the instant messaging company. It was learned of the agreement reached by the SEC with Longfin on charges of fraud against the latter.

SEC Activity in Crypto World

It is known that regulatory agencies around the world are increasingly playing a more active role in the crypto world. They are trying to apply the financial regulations in force in the various countries to particular cases involving the use of cryptocurrencies or blockchain technology in the field of finance.

It can be observed that this trend has grown mainly due to two reasons. The first of them is the increase in the number of private projects related to large crypto assets. Of course, it refers not only to the virtual currency of Facebook, Libra, announced last year but also to competing currencies, as would be the case of Telegram’s Gram.

The second reason for this growth in regulatory activity is a sharp increase in the amount of cybercrime involving crypto assets that have been committed, with either fraudulent investment schemes or robberies against platforms like Binance.

Therefore, the activity of institutions such as the SEC would include trying to investigate and reduce the number of these crimes in the crypto world, even without having an adequate legal framework to face the new situations experienced with this new kind of technology.

Agreement of SEC with Longfin

One of the interventions by the SEC against cybercrime would have been the fraud committed by the financial technology company, Longfin. It should be explained that it would have deceived American investors about its launch on the Nasdaq stock exchange, ending with returns of USD 3.5 million and a fine of USD 3.2 million.

According to the indictment issued through the Southern District Court of New York, Longfin would have misled potential investors by showing supposed earnings never obtained in reality and transactions with commodities that were mostly false.

However, the SEC would have reached an agreement with the CEO of Longfin, Venkata Meenavalli, for a total of USD 400,000, to be paid by the executive to avoid a prison sentence for the fraud committed. The amount would correspond to USD 159,000, equivalent to his salary within Longfin, and USD 232,000 plus interest, as a civil fine.

To conclude, it can be said that the case of Longfin would, therefore, be within the world of financial technology. This is a good example of how the State can act positively to protect the rights of citizens, even when it comes to new technologies such as those used by Longfin. This is a very relevant topic for those interested in learning more about the use of cryptocurrencies and blockchain technology.

By Willmen Blanco


Please enter your comment!
Please enter your name here