Judge William F. Kuntz of the New York Eastern District Court has ordered the CEO of Delaware-registered blockchain firm Veritaseum LLC and New York-registered Veritaseum Inc., Reggie Middleton to to pay $8.4 million in disgorgement, according to a new court order.
In addition to that, on Nov. 1, fintech publication FinanceFeeds reported that Middleton is also liable to pay the penalty of $1 million, according to the court order issued on Oct. 31.
The report read,
“According to the Order, signed on October 31, 2019, the defendants are liable for disgorgement of $7,891,600, representing certain profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $582,535, for a total of $8,474,137. Middleton is liable for a civil penalty in the amount of $1,000,000.”
In accordance with the court order, the defendants will not be allowed to indulge in any digital security offering as well.
The case was first carried in mid-August 2019 by the United States Security and exchange commission (SEC), when they filed a complaint against the Middleton and the other two firms as well.
In the document SEC stated that the entities were responsible for offering an unregistered initial coin offering of $14.8 million from late 2017 to 2018. The SEC requested a U.S District Court to freeze the defendants’ assets.
According to Coin360, “On Oct. 9, the SEC entered settlement talks with Veritaseum, rescheduling the initial conference at the New York Eastern District Court for Nov. 14, 2019. Since Oct. 9, Veritaseum (VERI) has dropped about 37% from $24 to $15 per coin at press time.” The SEC stated that the Offering was illegal, as there was no registration statement filed or in effect for the offers and sales of VERI.