The Securities and Exchange Commission has started administrative proceedings against American CryptoFed, a Wyoming-based decentralized autonomous organization (DAO), to weigh a stop order to suspend the registration of the offer and sale of its Ducat and Locke tokens.

The SEC said a Form S-1 registration statement filed by American CryptoFed last year did not include required information about the company’s business, management and financial condition.

The agency also said the statement contained “materially misleading statements and omissions, including inconsistent statements about whether the tokens are securities.”

“An issuer seeking to register the offer and sale of crypto assets as securities transactions must furnish the required disclosure information to the SEC,” David Hirsch, chief of the enforcement division’s crypto assets and cyber unit, said in a statement. “American CryptoFed not only failed to comply with the disclosure requirements of the federal securities laws, but it also claimed that the securities transactions they seek to register are not in fact securities transactions at all.”

The SEC said an investigation was conducted by Martin Zerwitz and Michael Baker of the SEC’s crypto assets and cyber unit.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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