SEC Sues 'Chicago Crypto Capital,' Employees for Illegally Selling BXY Tokens

Chicago Crypto Capital, its owner and two salesmen are being prosecuted for their illegal sale of BXY tokens to investors from August 2018 to September 2019.

AccessTimeIconSep 14, 2022 at 9:34 p.m. UTC
Updated May 11, 2023 at 6:17 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The U.S. Securities and Exchange Commission (SEC) on Wednesday sued a Chicago-based crypto investments company and three employees for allegedly selling $1.5 million in cryptocurrencies that weren’t registered with the investments regulator.

Chicago Crypto Capital (or CCC) owner Brian Amoah and salesmen Darcas Oliver Young and Elbert Elliott sold cryptos called BXY tokens to 100 investors, many of whom had no prior crypto experience, from August 2018 to September 2019, according to the complaint. They misled those investors about how they were handling the token, the complaint said.

BXY is a token aligned with the defunct crypto exchange Beaxy, according to the complaint. Hoping to raise capital and create a strong user base, Beaxy sold investors on a token that it said could generate initial coin offering (ICO)-era high gains. It had an agreement with CCC to sell them as well. CCC pocketed 3 cents of every 5 cent sale, the complaint said.

CCC sold BXY to inexperienced investors without informing them of the company’s kickbacks, the complaint said. CCC later neglected to deliver BXY tokens to some of their buyers.

The SEC accused the group of acting as unregistered brokers and fraudsters in violation of U.S. securities law. It is seeking to bar them from offering crypto securities.

The case is the latest action by an investment regulator that has pledged to crack down on alleged wrongdoing in crypto. Also Wednesday, SEC Chair Gary Gensler repeated his belief that “the vast majority” of cryptocurrencies are securities and therefore subject to his oversight.

CCC did not respond to CoinDesk’s request for comment.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Cam Thompson

Cam Thompson was a news reporter at CoinDesk.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about