New York Attorney General Ramps Up Securities Enforcement Of Cryptocurrency Companies

Cozen O'Connor

Cozen O'Connor

  • New York AG Letitia James reached a settlement with Chinese-language news and social media company GTV Media Group and its parent company Saraca Media Group, Inc. (collectively, “GTV”) to resolve allegations that GTV sold stock and cryptocurrencies without registering as securities dealers and/or commodities broker-dealers in violation of the state’s Martin Act.
  • According to the AG’s office, GTV allegedly conducted an offer and sale of its stock, raising hundreds of millions of dollars from over 1,200 investors, and pre-sold more than $30 million in two digital instruments that were promoted as cryptocurrencies, without registering as securities dealers and/or commodities broker-dealers in New York state.
  • Under the assurance of discontinuance, GTV will pay nearly $480 million to New York, but its monetary obligation will be deemed satisfied upon payment of that amount into a special fund in accordance with GTV’s contemporaneous $539 million settlement with the S. Securities and Exchange Commission related to its alleged unregistered offering of GTV common stock.
  • AG James also obtained a judgment against cryptocurrency trading platform Coinseed, Inc. and related individuals (collectively “Coinseed”), permanently stopping its unauthorized activities as an unregistered commodity broker-dealer, and appointing a receiver to safeguard investors’ funds, among other things.
  • As previously reported, AG James sued Coinseed in February 2021 over allegations that it violated the Martin Act by raising funds in an unregistered securities offering, and that it defrauded and deceived investors with false claims about its staff’s expertise and experience.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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