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The U.S. securities regulator, SEC, intensifies its legal actions against cryptocurrency firms, with Rari Capital being the latest target. The company and its founders are facing multiple charges for operating as unregistered brokers. This move aligns with SEC’s commitment made at the end of 2021, indicating that 2022 would see cryptocurrency companies facing serious consequences for their actions.
Latest Developments in the Cryptocurrency Lawsuit
The SEC has lodged complaints against the DeFi protocol Rari Capital and its co-founders Jai Bhavnani, Jack Lipstone, and David Lucid. The authority claims that the company misled investors regarding the characteristics and profitability of certain cryptocurrency investments, providing unregistered brokerage services in the process.
The SEC’s Stand on Investor Protection
Monique, the Director of the SEC’s San Francisco Regional Office, stated, “We allege that Rari Capital and its co-founders misled investors about the characteristics and profitability of some cryptocurrency investments and acted as unregistered brokers.”
To resolve the SEC’s allegations, Rari Capital and the three co-founders have agreed to various forms of relief, which include permanent injunctions, behavioral restraining orders, civil penalties, and a five-year ban on serving as an officer or director against the co-founders, without admitting or denying the charges.
