NY Court orders freezing of assets of crypto “guru” Reginald Middleton and his firm Veritaseum
The Securities and Exchange Commission has secured a Court order freezing the assets of the defendants in a cryptocurrency fraud action.
There has been some development in the action launched by the United States Securities and Exchange Commission (SEC) against Veritaseum, LLC and Veritaseum, Inc. and crypto “guru” Reginald Middleton.
Earlier today, Judge William F. Kuntz, II of the New York Eastern District Court, signed an Order imposing preliminary injunction freezing assets and granting other relief against the defendants.
As per the document, seen by FinanceFeeds, it is ordered that pending a final disposition of the action, the defendants – and each of their financial and brokerage institutions, agents, servants, employees, and attorneys, and those persons in active concert or participation with them who receive actual notice of such Order by personal service, facsimile service, telephonic notice, email notice or otherwise, and each of them – hold and retain within their control and otherwise prevent any withdrawal, transfer, pledge, encumbrance, assignment, dissipation, concealment or other disposal (including the use of any credit cards or any other incurring of debt) of any assets, funds, or other property.
It is further ordered that Josias N. Dewey of Holland & Knight is appointed as an independent intermediary.
The order also states that, pending the final disposition of this action, the defendants shall not destroy, alter, or conceal documents, books, and records that are in their possession, custody, or control, or the possession, custody, or control of each of their respective agents, servants, employees, and attorneys.
Let’s recall that the SEC has taken this emergency action aiming to stop the defendants’ dissipation of the approximately $8 million of investor proceeds that remain from the approximately $14.8 million they fraudulently raised in 2017 and early 2018 in an offering of digital securities. The defendants are alleged to have raised $14.8 million by making material misrepresentations and omissions about the unregistered securities they offered: digital assets called “VERI Tokens,” “VERI,” or “Veritas.” The defendants are said to have conducted this offering in a so-called initial coin offering (ICO) that took place from April 25, 2017 to May 26, 2017, and in post-ICO offers and sales.