SEC takes action against Chinese billionaire’s companies over $500M offerings

Sep 14, 2021 | CoinTelegraph News | 0 comments

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The SEC has taken action against three companies owned by Chinese Billionaire Guo Wengui for commingling the proceeds from two unregistered securities offerings.

The United States Securities and Exchange Commission (SEC) has charged three of Chinese billionaire Guo Wengui’s companies over an initial coin offering (ICO) and initial public offering (IPO) that fetched around $487 million combined.

The infamous Wengui, also known as Miles Kwok or Miles Guo, is an exiled Chinese businessman who currently resides in New York. Wengui is known for his controversial political takes and his ties to Donald Trump confidant, Steve Bannon.

The SEC submitted a cease and desist order on Sept. 13, with the documents showing that Guo’s companies have agreed to pay a settlement with the SEC within 14 days.

The SEC outlined two unregistered securities offerings from Guo’s firms, with GTV Media Group, Saraca Media Group and Voice of Guo Media conducting an IPO between April 1 and June 2020. Saraca and Voice of Guo, dubbed the “G Entities,” also conducted an ICO over the same period.

The ICO raised $34 million from investors seeking exposure to the firms’ G-Dollars — a virtual currency the issuer claimed could be exchanged for gold or fiat currency or used to purchase goods on the G Entities’ online platform.

The SEC found that the G Entities did not provide investors with information regarding how its purported digital asset and platform would be developed, adding:

“The G Entities have yet to develop or distribute the digital assets sold in the Coin Offering or a platform that would allow users to transact with or sell digital assets.”

Related: SEC chair doubles down, tells crypto firms ‘come in and talk to us’

Proceeds from the ICO were commingling with the funds raised in its $453 million stock offering that purported to distribute 10% of GTV’s common shares. The unregistered IPO attracted participation from 5,500 people.

The firms have agreed to pay $486.6 million in fines, prejudgment interest of $17.6 million and a civil penalty of $35 million combined.

News Source from CoinTelegraph.com

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