Posted 2 years ago | by Ben Armstrong

SEC Goes After Popular Crypto Project Founder

The Security & Exchange Commission is going after the founder of a former top 100 cryptocurrency project. Veritaseum (VERI), which as of today is ranked 272 on Coin Market Cap, has seen much better days. At one point in 2018, VERI was very squarely a top 100 project. Now, the product is all but dead as the SEC is going after founder Reggie Middleton for fraud.

In the true spirit of cryptocurrency, here is the roadmap for how a founder can get busted for fraud:

1. Lie about experience
2. Create fake demand for project
3. Claim to have working product
4. Manipulate price
5. Move project assets to personal bank account

And unlike most cryptocurrencies, Reggie Middleton was actually able to follow that roadmap.

All of the SEC’s allegations against Middleton can be seen directly on the SEC website. They did not parse words when describing the scheme Middleton ran:

The SEC filed charges against Reginald “Reggie” Middleton, a self-described “financial guru,” and two entities he controls, Veritaseum, Inc. and Veritaseum, LLC (collectively Veritaseum).  The Commission’s complaint, filed in federal court in Brooklyn, New York, alleges that the Defendants marketed and sold securities called “VERI” tokens on the internet, inducing retail investors to invest based on multiple material misrepresentations and omissions.  Among other things, Defendants allegedly knowingly misled investors about their prior business venture and the use of offering proceeds, touted oversized – but fictitious – investor demand for VERI, and claimed to have a product ready to generate revenue when no such product existed.  The complaint further alleges that Middleton manipulated the price of the VERI tokens trading on an unregistered digital asset platform.  The complaint also alleges that Middleton recently moved a significant amount of investor assets and then dissipated a portion of those assets, transferring them to Middleton’s personal account.

The SEC decided to step in when it became apparent Middleton was trying to move the funds to his own account. An emergency motion was filed by the SEC against Middleton on Monday.

While many altcoins have been called "scams" this is one of the first mid level to major alt coin that the SEC has gone after for literal fraud. There are probably many projects right now that may be fearful if they followed a similar roadmap.

About Ben Armstrong

ef4f73e9ddeb61becab57469962fa946?s=90&d=blank&r=g Veritaseum Founder Accused of Fraud by SECBen Armstrong is a YouTuber, podcaster, crypto enthusiast, & creator of BitBoyCrypto.com. Better known as BitBoy Crypto, he works hard to educate and inform the crypto community.

Ben has been involved with the world of cryptocurrency since 2012 when he first invested in Bitcoin. He used Charlie Shrem's BitInstant & lost Bitcoin in the Mt. Gox hack.

In 2018, Ben decided to go "full-time crypto" and focus all of his time and energy into expanding the reach of crypto.

If you have any questions or comments please feel free to email him at BitBoy@BitBoyCrypto.com or contact him on Twitter @BitBoy_Crypto.