SEC goes after purported blockchain marketplace over fraudulent initial coin offering

The United States Securities and Exchange Commission (SEC) has brought charges against purported blockchain-marketplace company Opporty International, Inc and its founder Sergii “Sergey” Grybniak over conducting a fraudulent initial coin offering (ICO) of unregistered digital asset securities.

The SEC’s complaint alleges that Grybniak and Opporty International raised approximately $600,000 from nearly 200 investors in an ICO of Opporty’s unregistered digital asset securities called “OPP Tokens.” Grybniak and Opporty allegedly made numerous false and misleading statements to investors, including exaggerating the number of actual and potential users of its business platform and falsely claiming that the ICO was “SEC regulated,” “SEC compliant,” and “SEC registered.”

According to the SEC’s complaint, Grybniak and Opporty engaged in other deceptive acts, including misappropriating third-party content without approval or attribution, to create the false impression that actual users of Opporty’s platform had created such content.

The complaint also names Clever Solution Inc., another entity controlled by Grybniak, as a relief defendant.

The SEC charges Grybniak and Opporty with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Sections 5(a) and (c) of the Securities Act, and also charges Grybniak with aiding and abetting Opporty’s violations.

In this action, the US regulator seeks permanent injunctions, conduct-based injunctions prohibiting the offering of digital or other securities, disgorgement plus interest, and civil penalties against Grybniak and Opporty, as well as an officer-and-director bar against Grybniak.

The case continues at the New York Eastern District Court.