U.S. government files charges against the operators of Blockchain Terminal’s “fraudulent” $30 million ICO

The U.S. Securities and Exchange Commission (SEC) and the Attorney's Office for the District of New Jersey each filed a lawsuit against Boaz Manor and his business partner for running an allegedly fraudulent ICO in 2017 that raised $30 million. As the story goes, the two defendants founded CG Blockchain and Blockchain Terminal (BCT) to build a Bloomberg Terminal clone for cryptocurrency traders. But Boaz Manor, a convicted criminal in Canada, used an alias to conceal his true identity and give his companies, and their token, a false sense of legitimacy.

Boaz and crew managed to raise $30 million from investors and secure a few high-profile partnerships, including one with financial data provider FactSet before his past became public knowledge. The SEC's complaint also notes Blockchain Terminal told investors it had over 20 clients using its product. In reality, the company produced only a dozen prototypes during Boaz's tenure, but the funds that received one never used it nor paid for it. Now, Boaz and his partner face civil and criminal lawsuits for their connection with Blockchain Terminal.

Why it matters:

• New frontiers are not immune to those that take advantage of investor exuberance (and greed). Crypto, and more specifically the ICO boom of 2017, is no exception. Fraudulent efforts ran rampant because there was little to no regulatory oversight at the time. While some criticize the government getting involved, a certain level of regulatory interference is necessary for the crypto industry to weed out bad actors and continue its maturation.
• The SEC is continuing to ramp up activity related to 2017 ICOs. Last Oct., the government agency settled with Block.one, the creators of EOS, and Sia for holding unregistered securities offerings. The SEC is also taking Telegram to court next month over its $1.7 billion ICO in 2018. To keep up with crypto-related regulatory events, Messari has compiled a list of all SEC actions in a handy resource page.