Veritaseum ICO issuers facing SEC legal action for alleged fraud, VERI drops 60%

The Commission filed an emergency legal action against the owner of Veritaseum, Reggie Middleton, whose ICO raised almost $15 million-obliterating the price of VERI.Combating fraudulent ICOs.

The latest example of the SEC tightening its regulatory grip is the legal complaint filed with the U.S. District Court for the Eastern District of New York.

According to court documents shared by the Hindenburg Research, the complaint was filed against Reginald Middleton, a New York resident accused of conducting an unregistered token sale.

The SEC claims that Veritaseum Inc. and Veritaseum LLC-two companies controlled by Middleton-raised $14.8 million through the sale of 51 million VERI tokens between late 2017 and 2018.

The regulator called for an emergency stop action to prevent Middleton, a self-proclaimed "Financial guru," from accessing the funds that remained from the VERI coin offering.

The base of SEC's case lies in the fact that Middleton reportedly tried to pass off VERI tokens as "Software," even going as far as calling them "Gift cards." All of this, the commission claims, makes the entire offering illegal.

Apart from misrepresenting the tokens, Middleton was also accused of fabricating trading volume on an unnamed exchange to artificially pump the price of the tokens.

The documents showed that Middleton was able to inflate VERI's price by 315 percent in a single day.

VERI token plunged nearly 60 percent after the SEC's scrutinization.

Judging by the commission's long-running war against fraudulent and unregistered coin offerings, Middleton is up for one hell of a legal battle.