New York fintech firm Titan Global Capital Management has agreed to pay the U.S. Securities and Exchange Commission over $1 million in fines after the regulator charged it with misleading investors over its crypto product. 

In a statement Monday, Wall Street’s top watchdog said that Titan made “conflicting disclosures to clients” about how it custodied crypto assets. 

Titan, according to Monday’s release, promised investors “annualized” performance results as high as 2,700% for its Titan Crypto strategy but didn’t tell investors the returns were extrapolated from a hypothetical three-week period during which no trading occurred. In other words: They were made up.

“Titan’s advertisements and disclosures painted a misleading picture of certain of its strategies for investors,” the SEC said. “This action serves as a warning for all advisers to ensure compliance.”

The SEC also alleged that Titan failed to adopt policies and procedures concerning employee personal trading in crypto assets.

Titan agreed to pay a $850,000 civil penalty that will be distributed to affected clients and give back ill-gotten gains and interest of over $192,000—but did not admit or deny the SEC’s findings. 

The SEC under current chairman Gary Gensler has cracked down hard on the digital assets industry this year by suing a number of major crypto brands—particularly those it claims have been flogging unregistered securities. 

But today’s charges marked the first time an entity had allegedly violated the SEC’s new marketing rule, which urges investment advisers to ensure the accuracy of disclosures made to existing and prospective investors. 

Titan allegedly violated the rule, the SEC said, by “advertising hypothetical performance metrics without having adopted and implemented required policies.”

But some—including Republican lawmakers—say the regulator has overstepped its mark. 

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