SEC Announces Settlement with Dallas-Based Crypto Firm Accused of Defrauding Investors

 

 

 

 

 

The U.S. Securities and Exchange Commission announced this week that it has reached a settlement with Dallas-based cryptocurrency firm Bitqyck Inc. In a press release, the SEC said that the company and its founders has defrauded investors who purchased its digital assets. The defendants were also accused of operating an unregistered exchange.

The company and founders Bruce Bise and Sam Mendez reportedly created two digital assets, Bitqy and BitqyM, which they sold to more than 13,000 investors for an amount in excess of $13 million. Investors reportedly received some $4.5 million for “referring new investors to Bitqyck” – but as a group still lost all but a third of their investment.

In its statement, the SEC detailed the allegations against the firm and its founders:

The SEC’s complaint alleges that Bise and Mendez misrepresented QyckDeals, a daily deals platform using Bitqy, as a global online marketplace, and falsely claimed that each Bitqy token provided fractional shares of Bitqyck stock through a “smart contract.” The complaint alleges that the defendants falsely told investors that BitqyM tokens provided an interest in a Bitqyck cryptocurrency mining facility powered by below-market rate electricity. In reality, 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. 

The defendants consented to final judgment, but neither admitted nor denied the SEC’s allegations. The company agreed to repay ill-gotten gains, prejudgment interest, and an $8,375,617 civil penalty. Bise consented to pay $890,254, while Mendez agreed to pay $850,022.

 

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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