SEC Charges ICO Issuer and CEO With Fraud and Unregistered Securities Offering

Washington, D.C.--(Newsfile Corp. - June 22, 2021) - The Securities and Exchange Commission today announced settled charges against Loci Inc. and its CEO John Wise for making materially false and misleading statementsin connection with an unregistered offer and sale of digital asset securities.

According to the SEC's order, Loci provided an intellectual property search service for inventors and others users through its software platform called InnVenn. The SECs order finds that from August 2017 through January 2018,Loci and Wise raised $7.6 million from investors by offering and selling digital tokens called LOCIcoin. As stated in the order, in promoting the ICO, Loci and Wise made numerous materially false statements to investors and potential investors, including false statements concerning the companys revenues, number of employees, and InnVenns user base. The order finds that Wise misused $38,163 in investor proceeds to pay his personal expenses. The order also finds that although LOCIcoins constituted securities, Locis offering was not registered with the SEC and no exemption from registration applied.

Loci and its CEO misled investors regarding critical aspects of Locis business, said Kristina Littman, Chief of the SEC Enforcement Divisions Cyber Unit. Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.

The SECs order finds that Wise and Loci violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933, and the registration provisions of Sections 5(a) and 5(c) of the Securities Act. Without admitting or denying the SEC's findings, Loci and Wise agreed to a cease and desist orderand to undertakings to destroy their remaining tokens, request the removal of the tokens from trading platforms, publish the SECs order on Locis social media channels, and refrain from participating in future digital asset securities offerings. The SECs order also imposes a $7.6 million civil penalty against Loci, and an officer and director bar as to Wise.

The SECs investigation was conducted by Brian Fitzsimons and Kathleen Hitchins of the Cyber Unit with assistance from Donald Furlano, and supervised by Brian O. Quinn, Carolyn M. Welshhans, and Ms. Littman.

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