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SEC Wins as Bitqyck Inc., and Its Founders Agree to Pay Fines for Defrauding Its Clients

A case filed by the US Securities and Exchange Commission in the US District Court of Northern District of Texas has finally come to an end with the defendants agreeing to pay fines amounting to $10 million. Bitqyck Inc., a Texas-based firm and its founder were accused of defrauding its 13,000 clients who injected funds into the firm in exchange for equity.

Per SEC’s court filings, the above firms and its founders run an unregistered exchange which offered investors offerings in securities in two digital assets BitqyM and Bitqy. Further on, the court documents indicate the founders Bruce Bise and Sam Mendez lured investors into their scheme by promising them their investments in Bitqyck will translate to a fractional share of the startup. For the latter task, the founders put in place a smart contract.

Investors were Also Promised Interests from a Crypto Mining Facility

On the other hand, those who injected funds into the firm via BitqtM tokens, the founders told them their holdings would generate interests for them from Bitqyck cryptocurrency mining facility. To make the deal seem lucrative, Bitqyck informed BitqtM tokens holders the crypto mining facility ran on sub-market-rate electricity. Similarly, for referring new clients to the firm, investors got $4.5 million as a small incentive for redirecting new clients to Bitqyck.

However, in the end, they lost two-thirds of their entire investment package. Besides the above, Bitqyck, through its founders, also operated TradeBQ an unregistered national security exchange dealing with trading of Bitqy as security. From its scheme, Bitqyck got $13 million from its unregistered securities. However, now they have to part with $10 million.

When broken down into specific charges, Bitqyck and its founders agreed to all charges leveled against them. The founders Mendez and Bise agreed to pay a civil penalty, prejudgment interest and disgorgement charges fee amounting to $850, 022 and $890,254 respectively. On the other hand, their firm through its representatives agreed to pay all fines on civil, prejudgment interest and disgorgement charges. For the latter, their penalties amount to $8,375,617, bringing the total sum roughly to $10 million.

Alexis Von Loh
Alexis Von Loh
Alexis is the Chief Editor of Crypto Economy, is responsible for reviewing articles, training new editors and implementing new strategies to the editorial team. She arrived in the world of cryptocurrencies in January 2017 and since then has not stopped training and studying about the sector, blockchain and the new projects that appear.
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