In a statement released yesterday, the US Securities Exchange Commission (SEC) also alleged the firm and its founders Bruce Bise and Sam Mendez fraudulently promised investors interest in a cryptocurrency mining facility through sales of a secondary token, BitqyM, and its related blockchain-powered smart contract. That facility was supposed to be powered by below-market rate electricity. As it turns out, there was no such deal, and no such facility – the entire mining operation was a fake. “Bitqyck, aided and abetted by its founders, also is alleged to have illegally operated TradeBQ, an unregistered national security exchange offering trading in a single security, Bitqy,” said the SEC. Although Bitqyck’s founders did not confirm or deny the allegations, the pair agreed to return all money raised (more than $13 million) with interest. Bise and Mendez will also need to pay a civil penalty of $8,375,617, as well as $890,254 and $850,022 respectively. This continues a veritable trend of judgements against (allegedly) fraudulent cryptocurrency startups across the US and beyond. Earlier this month, the SEC moved against a “self-described financial guru” that raised $14.8 million with an allegedly fraudulent ICO, while last week saw the SEC reach a settlement with a Russian firm that advertised initial coin offerings without disclosing that it had been paid to shill the coins. Whoops.
