SEC raises charges against Boon.Tech and CEO for $5 million ICO

Steffy Bogdanova
August 14, 2020 9:15 am

The Securities and Exchange Commission announced raising charges against blockchain jobs marketplace Boon.Tech and its chief executive officer Rajesh Pavithran for fraud and registration violations regarding a $5 million initial coin offering (ICO) of digital asset securities.

The US regulator alleges that from November 2017 to January 2018, Boon.Tech and its CEO raised $5 million by selling Boon Coins to over 1,500 investors in the US and worldwide. They raised funding to develop and market a platform to connect employers posting jobs with freelancers seeking work.

SEC found that the Boon Coins were sold as investment contracts and that made them securities. However, Boon.Tech and Pavithran failed to register the offering.  Moreover, Pavithran and Boon.Tech made false statements like claiming that Boon.Techs’s platform eliminated digital asset markets volatility with their patent-pending technology to hedge Boon Coins against the US dollar, when in reality Boon.Tech had no such technology.  Boon.Tech and Pavithran also claimed to investors that their platform was faster than their competitors because it was built on Boon.Tech’s own blockchain, when in fact the platform was developed on the same blockchain as their competitors.

SEC

Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit said:

Investors are entitled to truthful disclosures from issuers of securities, whether digital or otherwise.  Pavithran and Boon.Tech defrauded investors by convincing them to fund this endeavor based on the allure of innovation that simply did not exist.

The US watchdog found that Boon.Tech and Pavithran violated the federal securities laws. The company and its CEO agreed to settled the charges with disgorging the $5 million raised in the ICO plus prejudgment interest of $600,334.

SEC’s order also requires that Boon.Tech and Pavithran destroy all Boon Coins and remove them from further trading on all third-party digital asset trading platforms, as well as refrain from participating in future offerings of digital asset securities.  The order also requires Pavithran to pay a penalty of $150,000 and prohobits him from serving as an officer or director of a public company.

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LeapRate Analyst

Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
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