FINRA Charges HempCoin (HMP)’s Broker-Dealer for Offering Unregistered Securities

 In Exchanges, Governments and Regulations

FINRA’s disciplinary action against HMP issuer is the first such measure involving cryptocurrency.

The US financial industry’s self-regulatory body, FINRA, has begun a disciplinary procedure against Timothy Tilton Ayre, the issuer and the broker-dealer of HempCoin (HMP) cryptocurrency, for offering unregistered securities, a FINRA statement on Tuesday announced. Note that the HMP is a different project from Hemp Coin (THC).

FINRA charged Ayre on market integrity and investor protection grounds in the body’s ‘first disciplinary action involving cryptocurrencies’.  Ayre made multiple false market announcements from 2013 to 2016 by failing to reveal the real intentions of his company, RMTN, which unlawfully was creating and selling HempCoin. The HMP issuer also used misleading facts in the company’s financial statements, according to the self-regulatory organization.

“In the complaint, FINRA alleges that, from January 2013 through October 2016, Ayre attempted to lure public investment in his worthless public company, Rocky Mountain Ayre, Inc. (RMTN) by issuing and selling HempCoin – which he publicized as “the first minable coin backed by marketable securities” – and by making fraudulent, positive statements about RMTN’s business and finances. RMTN was quoted on the Pink Market of OTC Markets Group and traded over the counter,” FINRA said in the statement.

Moreover, the FINRA’s complaint revealed that in 2015 Ayre bought the rights of HMP and redesigned the coin as ‘the world’s first currency to represent equity ownership’ as a publicly traded company. He offered 0.10 shares of RTMN common stock for every HMP. The investors lured in mined 81 million cryptos and were buying and selling the coin on two exchanges, C-Cex and Yobit.

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The HempCoin website has nearly no information as most of the sections are empty, including ‘Leadership’ and ‘Contact US’ as seen at 14:52 UTC on Thursday.

FINRA’s charges against Ayre are the first step in a process with possible outcomes including ‘a fine, censure, suspension or bar from the securities industry, disgorgement of gains associated with the violations and payment of restitution.’ Ayre can now send his response and request.

As a self-regulatory body for US broker-dealers, FINRA works under the oversight of the Securities and Exchange Commission (SEC). In July, the organization requested information about the existing or planned cryptocurrency activities of its associates in a bid for more investor protection.

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