SEC Fines and sanctions Blockchain Author and his firm For Securities Violations.

Alex Tapscott and his investment firm NextBlock Global has been fined over securities violations by the U.S. Securities and Exchange Commission (SEC). Alex Tapscott’s Canada-based NextBlock firm had been offering unregistered securities according to allegations by the SEC. It was also alleged that false misrepresentations were made about the firm in the process of seeking investors. Alex Tapscott is a blockchain co-author as well as the owner of Nextblock; In light of these securities violation a $25,000 fine has accrued to him and an already issued order of a cease-and-desist on further securities violations (him or his firm) has been put in place.

The commission said that NextBlock raised 20 million dollars through convertible debentures facilitating its launch in 2017 to invest in blockchain and cryptocurrency companies at the time. In a bid to generate funds from U.S. investors, Canada and anywhere else possible, NextBlock and Tapscott falsified the existence of prominent blockchain industry individuals as advisors to his firm, the SEC further said. NextBlock and Tapscott had initiated another funding round and hired two Canadian investment banks as advisors for the effort, as well as to help list the firm on the Toronto Stock Exchange, according to the order. However, due to media reports of misrepresentations to investors, NextBlock canceled the round and its initial public offering plan.

These acts went beyond allegations when NextBlock later voluntarily initiated proceedings in an Ontario court to liquidate its existing digital asset holdings, wind up operations, and return the funds to debenture holders. The return of funds included the holders’ principal investment and profits (approximately 140 percent as of March 2019)

Tapscott also surrendered his right to collect his share of profits in NextBlock’s worth which culminates in over $2 million. This amount was retained by the firm, forming a part of the distributions to debenture holders, the order states.

According to the SEC, Tapscott and NextBlock had quickly tried to remedy the situation; hence they took this into account for agreement in the terms of settlement and after the firm’s payment for administrative penalty in figures of 700,000 Canadian dollars (roughly US$520,000), further civil penalty had not been imposed on the company.


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Credits -Yogita Khatri



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