The U.S. Securities and Exchange Commission hasn’t forgotten about the 2017 ICO craze.

The SEC filed charges on Friday against four men behind Bermudan company Arbitrade Ltd., Canadian firm Cryptobontix Inc., and U.A.E.-based Sion Trading for allegedly running a pump-and-dump cryptocurrency token scheme worth $36.8 million from 2017 until 2019.

The men behind the alleged scam claimed they had $10 billion worth of real gold bullion in a reserve which would back their Ethereum-based crypto token ironically named Dignity (DIG). 

DIG’s makers claimed that each of the three billion total DIG tokens was backed by one dollar worth of gold and that DIG tokens could be redeemed for the gold.

The SEC alleges that Troy R.J. Hogg, James L. Goldberg, Stephen L. Braverman, and “gold trader” Max W. Barber defrauded customers by lying about the existence of the gold and pretending to hire accounting firms to “audit” said gold.

According to the SEC filing, DIG was created by Russian developers in 2017. The token was then pumped from May 2018 until January 2019 via “false and misleading” press releases and a press conference. 

Notably, DIG was only available for purchase on Russian crypto exchange Livecoin, which was later shut down in January 2021 due to an alleged hack.

To make matters worse, Hogg, Goldberg, and Braverman allegedly sold DIG tokens on Livecoin at “artificially inflated prices,” according to the SEC.

The alleged fraudsters have been accused of violating numerous sections of the Securities Act of 1933 and the Securities Exchange Act of 1934. 

The SEC wants the accused to pay back all profits earned during the alleged scheme as well as additional civil money penalties. The SEC is also seeking an officer and director bar against the four men—a restriction that would prohibit them from ever becoming officers or directors of a publicly traded company.

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