FINRA Initiates First Ever Disciplinary Action On Crypto Related Firm September 13, 2018 September 13, 2018 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
NewsSeptember 13, 2018 by Kelly Cromley

FINRA Initiates First Ever Disciplinary Action On Crypto Related Firm

The US Financial Industry Regulatory Authority has initiated action against a firm which attempted to lure investments by offering unregistered crypto securities. It is the first time FINRA has taken action in an incident involving cryptocurrencies.

According to FINRA the promoter “attempted to lure public investment in his worthless public company” by releasing “the first minable coin backed by marketable securities.”

FINRA’s crypto disciplinary action

The regulator revealed “that it filed a complaint against Timothy Tilton Ayre of Agawam, Massachusetts, charging him with securities fraud and the unlawful distribution of an unregistered cryptocurrency security called Hempcoin.”

FINRA further stated that “This case represents FINRA’s first disciplinary action involving cryptocurrencies.”

FINRA, which is tasked with protecting investors by making sure that broker-dealer industry operates in a transparent and honest manner, is a not-for-profit organization empowered by Congress.

FINRA is overseen by the US SEC, but is not part of the government. Additionally, the website of FINRA indicates that it “has the authority to fine, suspend or bar brokers and firms from the industry.”

Regarding the disciplinary action, FINRA states, “The issuance of a disciplinary complaint represents the initiation of a formal proceeding by FINRA in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Possible remedies include a fine, censure, suspension or bar from the securities industry, disgorgement of gains associated with the violations and payment of restitution.”

Ayre, the company which faces the disciplinary action, is a publicly traded company listed on the OTC Grey market under the RMTN trading symbol. In its report, FINRA has pointed out that between January 2013 and October 2016, Ayre issued “fraudulent, positive statements about RMTN’s business finances.”

FINRA further elaborated with the following statement:

“Ayre attempted to lure public investment in his worthless public company, Rocky Mountain Ayre Inc. (RMTN), by issuing and selling Hempcoin – which he publicized as ‘the first minable coin backed by marketable securities’.”

FINRA explained that Ayre, having bought Hempcoin rights in June 2015, repacked the crypto token as a security backed by RMTN stock and offered it as “the world’s first currency to represent equity ownership” in a publicly listed firm. Ayre also guaranteed that “each coin was equivalent to 0.10 shares of RMTN common stock.” With such an assurance in place, investors mined more than 81 million Hempcoin until the end of 2017. The crypto was traded in two exchanges.

FINRA doubts that “Ayre defrauded investors in RMTN by making materially false statements and omissions regarding the nature of RMTN’s business, failing to disclose his creation and unlawful distribution of Hempcoin, and making multiple false and misleading statements in RMTN’s financial statements.”

FINRA charged Ayre “with the unlawful distribution of an unregistered security because he never registered Hempcoin and no exemption to registration applied.”

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.