New Jersey has reportedly filed a complaint against a blockchain-centered online rental forum for selling more than $400,000 worth of unregistered securities.
Unregistered Securities Worth $410,000
The state claimed that Pocketinns, Inc. Sarvajnya G. Mada, the company’s president, offered and sold unregistered securities worth around $410,000. The assets were reportedly in the guise of a crypto called “PINNS Tokens.”
The PINNS tokens were said to have been sold via an initial token offering that took place between January 15 and January 31, 2018. Neither Mada nor the company Pocketinns are said to be registered with New Jersey’s Bureau of Securities.
Mada and Pocketinns, Inc. supposedly sold the crypto to 217 investors which was a violation of the state’s Uniform Securities Law. Only 11 of the said investors were able to produce documentation that proved they carried an accredited investor status.
Mada and his company then planned to exchange the tokens they sold for Ether (ETH). At the time of the sale, Ether was valued at about $728.
The State of New Jersey alleged that Pocketinns, Inc. planned to raise $46 million by selling 30 million of their tokens.
Paul Rodriguez on the Issue
The acting director of the state’s Division of Consumer Affairs, Paul Rodriguez, said that by not verifying that buyers were accredited investors who can meet the risks linked with unregistered securities, Pocketinns broke the law and left investors vulnerable to possibly devastating financial losses.
The charges against Mada and company also seeks to forestall them from offering securities in the state and evaluate civil monetary fines against the defendants for every violation they made of the Securities law. It also demands that they pay damages to investors who joined the offering.