January 21, 2020/US SEC
The Securities and Exchange Commission charged a purported blockchain-marketplace company and its founder with conducting a fraudulent initial coin offering (ICO) of unregistered digital asset securities.
As alleged in the SEC’s complaint, Sergii “Sergey” Grybniak and his company Opporty International, Inc. raised approximately $600,000 from nearly 200 investors in an ICO of Opporty’s unregistered digital asset securities called “OPP Tokens.” Grybniak and Opporty allegedly made multiple false and misleading statements to investors, including exaggerating the number of actual and potential users of its business platform and falsely claiming that the ICO was “SEC regulated,” “SEC compliant,” and “SEC registered.” The SEC’s complaint further alleges that Grybniak and Opporty engaged in other deceptive acts, including misappropriating third-party content without approval or attribution, to create the false impression that actual users of Opporty’s platform had created such content.
The SEC’s complaint charges Grybniak and Opporty with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Sections 5(a) and (c) of the Securities Act, and also charges Grybniak with aiding and abetting Opporty’s violations. The SEC seeks permanent injunctions, conduct-based injunctions prohibiting the offering of digital or other securities, disgorgement plus interest, and civil penalties against Grybniak and Opporty, as well as an officer-and-director bar against Grybniak. The complaint also names Clever Solution Inc., another entity controlled by Grybniak, as a relief defendant.
The SEC’s investigation was conducted by Mark Oh and Kendra Kinnaird, and was supervised by Fuad Rana and Anita B. Bandy of the SEC’s Washington, D.C. office, in coordination with the SEC’s Cyber Unit. The litigation will be handled by Nick Margida and supervised by Tom Bednar.