• The SEC has charged Titan Global Capital Management for violating the amended marketing rule of 2020.
• Titan made misleading claims about their “Titan Crypto” product on their website, which included unclear statements about crypto asset custody and other policies.
• The firm agreed to a cease-and-desist order along with a fine of $850,000 and disgorgement of ill-gotten gains worth $192,454.
SEC Charges Crypto Investment Manager Titan With Misleading Advertising Claims
The U.S. Securities and Exchange Commission (SEC) has brought charges against cryptocurrency investment manager Titan Global Capital Management for violating the SEC’s amended marketing rule of December 2020. This is the first case under this revised regulation. According to the SEC, Titan made misleading claims on its website that were based on “hypothetical performance” which could lead to returns of up to 2,700% on its “Titan Crypto” product. The firm also made unclear statements about crypto asset custody and other policies and failed to adopt appropriate policies on employee trading in the period leading up to October 2022.
Cease-and-Desist Order Issued by SEC
The SEC issued a cease-and-desist order along with censure and penalties after pressing charges related to advertising and compliance failures by Titan Global Capital Management. Osman Nawaz from the senior enforcement officer at the agency stated: “This action serves as a warning for all advisers to ensure compliance.” The firm self-reported some issues before agreeing to the SEC order without admitting or denying any findings made by them. As part of this order, there will be $850,000 fine that will be distributed among affected customers along with $192,454 in disgorgement of ill-gotten gains with interest payments.
Focus On Tightened Enforcement For Crypto Investment Advisers
The SEC has announced tightened enforcement for crypto investment advisers as part of its regulatory goal back in February 2021 through a statement from its Division of Examinations. This marks an increased focus on all participants within the crypto market including those that have affirmatively registered with and are regulated by the SEC as well as ensuring compliance among advisers in general.
Titan Registered By Both The SEC And FINRA
Titan is registered by both the U.S Securities & Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). Despite charges being pressed against them, they cooperated with investigations before agreeing to orders issued by the regulator without admitting or denying any findings from it either way..
This case serves an important reminder that all companies dealing within cryptocurrencies need to adhere strictly to regulations set out by regulators if they wish remain compliant within this space while avoiding hefty fines or legal action being taken against them