Recently, the U.S. financial regulatory authority (FINRA) issued a crypto-related sanction against Timothy Tilton Ayre of Agawam, Massachusetts. The regulatory body filed a complaint against Ayre that borders on the illegal distribution of an unregistered cryptocurrency called Hempcoin.
The not-for-profit organization is mandated by U.S. congress to ensure that the investment industry remains transparent and fair. However, the organization is not officially a government body, but it is overseen by the U.S. Security and Exchange Commission. The organization’s website revealed that the body has the power to suspend, fine, or bar violating brokers and firms.
However the published sanction revealed that the filing of a disciplinary action just represent the formal preceding by the FINRA. Therefore the allegations against the defendant has not been established and a verdict on the allegations contained in the publication has not be reached.
Further, all parties involved can file a response and request for a hearing before the organization’s disciplinary committee. The publication also stated that the possible punishments include censure, a fine, and suspension from the broker-dealer industry. In addition, the body might require the broker give up all profits from the violations and pay a financial reparation.
FINRA versus Hempcoin
FINRA stated that Ayre did not register Hempcoin neither did he receive an exemption to registration. The body claimed that Ayre bought the rights to Hempcoin in 2015 and rebranded the token as a security supported by RMTN’s common stock. FINRA went further to reveal that the accused marketed Hempcoin as the first cryptocurrency backed by a publicly traded company.
Ayre had mined about 81 million units of Hempcoin by 2017. Then, he promised customers that each token represents 0.10 shares of RMTN’s common stock. Also, the cryptocurrency was listed in two crypto exchanges.
Therefore, FINRA believes that Ayre scammed investors in RMTN’s stock by making multiple inaccurate and deceptive statements in RMTN’s financial statements.