Veritaseum founder Reggie Middleton has reached a settlement with the United States Securities and Exchange Commission (SEC) for USD 9.5 million, which includes disgorgement, pre-judgement interest, and a civil penalty.

Further, Middleton is banned from ever having a public company or participating in an ICO. Although this penalty is monetarily heavy, Middleton was able to settle without admitting guilt and will not be going to jail.

The Veritaseum initial coin offering (ICO) raised USD 14.8 million, despite having a relatively vague mission of building blockchain-based peer to peer capital markets. Soon after the ICO, a hacker supposedly stole 36,000 tokens worth USD 8 million at the time. Indeed, the price of Veritaseum skyrocketed in January 2018 to nearly USD 500 with a market cap of USD 1 billion, which was simultaneous with the ICO boom and the Bitcoin rally to USD 20,000.

The SEC alleges Middleton conspired to manipulate the market during that time, in addition to misappropriating USD 520,000 of investors funds for himself.

Despite Veritaseum essentially being nuked by the SEC, it still has a market cap of USD 38 million, although liquidity is low with a volume of only USD 20,000 per day.

 

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