The U.S. Securities and Exchange Commission (SEC) has barred and fined the issuer of Tomahawkcoin for running a “fraudulent Initial Coin Offering (ICO)” to fund oil exploration and drilling in California.
The regulator’s order finds that Tomahawk Exploration LLC and its founder David Laurance violated the registration and antifraud provisions of the federal securities laws.
Without admitting or denying the SEC’s findings, Tomahawk and Laurance have consented to the order to bar the ICO and and a $30,000 penalty.
“Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs,” said Robert Cohen, Chief of the SEC’s Cyber Unit.
Laurance attempted to raise money through the sale of blockchain-based digital tokens called “Tomahawkcoins” using misleading promotional materials.
The materials provided inflated projections of oil production that were contradicted by the company’s own internal analysis. Laurance also misleadingly suggested that Tomahawk possessed leases for drilling sites when it did not.
Further, the materials described Laurance as having a “flawless background” without disclosing his prior criminal conviction for his role in fraudulent securities offerings.
Tomahawk also fraudulently claimed that token owners could convert the Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens.
by RTTNews Staff Writer
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