SEC blocks inflation-protected crypto token – MarketWatch

SEC blocks inflation-protected crypto token – MarketWatch

The Securities and Exchange Commission halted the registration of two digital securities offered by American CryptoFed because information included in its registration documents was “deficient and misleading,” the regulator said Wednesday.

American CryptoFed is a Wyoming-based organization whose mission is “to create and maintain a monetary system with zero inflation, zero deflation and zero transaction costs,” according to an SEC filing submitted in September.

Read more: How Wyoming became the promised land for bitcoin investors

The organization says its inflation-protected Ducat token will be controlled by an algorithm that creates and destroys Ducats as needed to prevent any inflation or deflation in the currency, as measured by the personal consumption expenditure index issued by the Commerce Department.

In its filing seeking to register the Ducat and an accompanying token, the Locke, as securities, CryptoFed said it wanted to register them as “utility tokens” and “not as securities,” even though the SEC does not register utility tokens and oversees the offering of securities as defined by federal law.

The SEC said that American CryptoFed also failed to report required information about the two tokens and about American CryptoFed’s “business, management, and financial condition, including audited financial statements.”

Marian Orr, American CryptoFed’s chief executive officer, told MarketWatch that she learned about the SEC’s decision through the press before the SEC provider her formal notice Wednesday morning. “I was disappointed and
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