The Financial Industry Regulatory Authority has issued its first disciplinary action involving cryptocurrencies.
Finra, a self-regulatory organization, on Tuesday filed a complaint against Timothy Tilton Ayre, saying he committed securities fraud and unlawfully distributed HempCoin, an unregistered, cannabis-focused cryptocurrency security.
The complaint comes after scrutiny from regulators, including the Securities and Exchange Commission, in addition to well publicized scams and a broad selloff in the cryptocurrency market.
Finra alleges in the complaint that between January 2013 and October 2016, Ayre, of Agawam, Mass., “attempted to lure public investment in his worthless public company,” Rocky Mountain Ayre Inc. The broker allegedly issued and sold HempCoin, which he publicized as “the first minable coin backed by marketable securities,” and allegedly made fraudulent statements about Rocky Mountain Ayre’s business and finances, according to the complaint. The company was quoted on the Pink Market of OTC Markets Group and was traded over the counter.
An expanded version of this report appears on WSJ.com.
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