A company and its founder ("respondents") agreed to settle SEC charges of improperly selling blockchain-based digital tokens. The respondents were charged with failing to file a required registration statement and making false statements, as well as hiding the founder's prior criminal conviction.
According to the SEC Order, Tomahawk Exploration LLC ("Tomahawk") promoted a fraudulent initial coin offering ("ICO") to subsidize an oil exploration and drilling project. The SEC reported that Tomahawk and its founder, David Laurance, offered and sold blockchain-based digital tokens called "Tomahawkcoins" ("TOM") through an online ICO. According to the SEC, Tomahawk's website falsely touted the tokens' potential for long-term profits based on anticipated oil production. The SEC also alleged that Tomahawk (i) used inflated projections of oil production that were misleading and (ii) deceived TOM token owners by telling them that they could convert the tokens into equity.
Respondents consented "to a cease and desist order and Laurance consented to an officer and director bar, penny stock bar, and a $30,000 penalty."
The SEC Office of Investor Education and Advocacy also issued an Investor Alert that encouraged investors to check the backgrounds of individuals selling them an investment by using the free search tool on Investor.gov.
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