HomeAltcoin NewsNew Jersey's Pocket Inns Facing Unregistered Securities Lawsuit

New Jersey’s Pocket Inns Facing Unregistered Securities Lawsuit

Date:

Related stories

It’s Not Just Degens, Institutions Love Memecoins Too

In a report released by Bybit on June 4,...

Solana (SOL) Price Analysis: Dips Attractive Near $135

Solana price started a downside correction from the...

Cardano (ADA) Price Analysis: Can Bulls Clear This Hurdle?

ADA price is attempting a fresh increase from...
spot_imgspot_img

A cryptocurrency platform in New Jersey is facing a massive lawsuit over what state regulators have deemed illegal and unregistered sales. Pocket Inns Inc., located in West Windsor, New Jersey, sough to raise an alleged $46 million through sales of its new cryptocurrency token known as PINNS.

 Pocket Inns Is in Big Trouble

The New Jersey Bureau of Securities is now filing suit against the company alleging that it sold unregistered securities to users. The sales occurred between the firm and 217 potential investors, two of which were in New Jersey, on the dates of January 15 through 18 in 2018. The company was advertising PINNS to customers in exchange for Ethereum tokens, which at the time were trading for nearly $1,400 each.

The lawsuit is seeking damages brought on by the sale of the unregistered tokens. It is also accounting for legal fees and asking that restitution be paid to any investors involved, which the New Jersey state regulator alleges were scammed into accepting unlicensed monies. Attorney General Gurbir S. Grewal issued a statement regarding the suit, explaining:

 Our securities laws apply to anyone offering or selling securities in this state, regardless of whether those securities are purchased with U.S. dollars or virtual currencies, and regardless of whether they are distributed in certificated form or through blockchain technology… The lawsuit we filed makes it clear that individuals selling cryptocurrency-related investment products in New Jersey must comply with the law or face serious consequences.

According to legal documents, Pocket Inns. Inc. used some of the transaction funds to develop new branches of its business, including research, engineering, sales and marketing. While this is allowed in the state of New Jersey, the company failed to attain proof that its customers each had a net worth of approximately $1 million each or an annual income of at least $200,000. This is required in New Jersey if a company is not going to be subjected to registration laws.

Thus far, only 11 customers have been able to substantiate these claims, leaving the finances of 206 customers unaccounted for.

 Why Disobeying the Rules Leads to Further Problems

Paul Rodriguez, acting director of the state Division of Consumer Affairs, released a statement mentioning:

By failing to take reasonable steps to verify that purchases were accredited investors capable of bearing the increased risks associated with unregistered securities, the defendants violated the law and exposed investors to financial losses that could have been devastating… We’re reminding investors to be extra vigilant about fully vetting what is being sold, especially before investing with cryptocurrency.

Issues like these have come up in the past, and the Securities and Exchange Commission (SEC) has been on the tails of several businesses that have sought to sell unregistered securities to investors. Among the most recent cases was one involving the Gladius Network in late February of this year.

Nick Marinoff
Nick Marinoffhttps://www.livebitcoinnews.com/
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and Benzinga.com, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img