The U.S. Securities and Exchange Commission (SEC) has intervened in an ongoing alleged digital asset fraud after identifying an individual raising capital while falsely claiming to hold the necessary securities licenses. The SEC filed an emergency action and temporary restraining order against Shawn C. Cutting of Sandpoint, Idaho, has petitioned the court to freeze his assets in connection with the allegations temporarily.
Cutting allegedly raised millions of dollars by falsely claiming his licensing status.
The U.S. financial regulator has alleged Cutting has raised millions of dollars off the back of false claims about his licensing status, as well as through misrepresenting investment returns and misappropriating investor money. The SEC alleges Cutting began raising money in October 2017 from investors on a false prospectus, securing $6.9 million from some 450 individual investors. Investors were promised the funds would be pooled and invested into digital assets, offering a rate of return in excess of 50% a month. Cutting allegedly falsely held out as having experience as a financial adviser and told investors he held securities licenses, both of which were untrue.
Cutting also allegedly misappropriated hundreds of thousands of dollars for personal use.
The accused is also reported to have misappropriated hundreds of thousands of dollars for personal expenditures, including luxury cars, home improvements, and paying for his daughter’s wedding. Cutting is alleged to have solicited more money by falsifying results to induce further investment. Cutting allegedly also spent $760,000 in Ponzi-style payouts to investors to prolong the massive cryptocurrency fraud. The SEC has filed its complaint with the U.S. District Court for the District of Idaho, setting out a number of charges against him under the Securities Act of 1933. The SEC has urged the court for emergency relief alongside a permanent injunction to halt Cutting’s alleged behavior in soliciting investments.