Home News Bitqyck Exchange Ordered by SEC to Pay $8,375,617 in Disgorgement, Interest, and...

Bitqyck Exchange Ordered by SEC to Pay $8,375,617 in Disgorgement, Interest, and Civil Penalty

TL;DR: The US Securities and Exchange Commission (SEC) announced “settled charges with Bitqyck Inc. and its founders, who allegedly defrauded investors in securities offerings of two digital assets, Bitqy and BitqyM, and operated an unregistered exchange to permit trading in one of them, a digital token called Bitqy.” The arrangement includes an order requiring the exchange “pay disgorgement, prejudgment interest and a civil penalty of $8,375,617.”

Bitqyck Exchange Ordered by SEC to Pay $8,375,617

The SEC continued its crackdown on what it calls unregistered offerings and operations of similarly inclined digital asset exchanges. In this case, the Dallas, Texas-based exchange Bitqyck and its founders, Bruce Bise and Sam Mendez, settled a case “involving unregistered securities offerings to more than 13,000 investors, raising more than $13 million,” the agency alleged. “Investors allegedly received $4.5 million for referring new investors to Bitqyck but collectively lost more than two-thirds of their investment in the Dallas-based company.”

The scheme reportedly also involved yet another spinoff, QyckDeals, that acted as a worldwide online market for Bitqy tokens. Victims were assured “each Bitqy token provided fractional shares of Bitqyck stock through a ‘smart contract,'” the SEC explained. A subset, BitqyM tokens, were somehow linked to a cheap source of cryptocurrency-mining related energy, the SEC claimed investors were told.

Bitqyck

“In reality,” the agency insisted, “Bitqyck did not have access to discounted electricity and didn’t own any mining facility. Bitqyck, aided and abetted by its founders, also is alleged to have illegally operated TradeBQ, an unregistered national security exchange offering trading in a single security, Bitqy.”

Officials chalk up the supposed scam to a lack of sophistication on the part of relatively new investors trying to comprehend the brave new world of crypto. The rush to find the latest Bitcoin, to grab ahold of that unicorn, is an old story … and it’s becoming a rather frequent one recounted in ecosystem circles. David Peavler, Director of the SEC’s Fort Worth Regional Office, stressed, “We allege that the defendants took advantage of investors’ appetite for these investments and fraudulently raised millions of dollars by lying about their business.”

Curiously, Bitqyck, Bise, and Mendez do not have to admit guilt in the case, and will instead fork-over more than $8 million to make this go away. “Bise and Mendez consented to the entry of an order that they each pay disgorgement, prejudgment interest and a civil penalty of $890,254 and $850,022, respectively,” the agency also noted.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH. 

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