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The U.S. Securities and Exchange Commission (SEC) has initiated a lawsuit against Donald Basile, the founder of the cryptocurrency project Bitcoin Latinum, accusing him of fraud amounting to $16 million, deceiving investors, and breaching securities laws.
According to the SEC’s complaint filed in the Eastern District of New York, Basile misled investors by claiming that his Bitcoin Latinum (LTNM) tokens were insured and backed by up to $1 billion. The regulator asserts that no insurance company has ever provided coverage for these tokens, nor has a trust or asset pool been established for them. Basile has failed to present evidence that contradicts these allegations, the agency stated.
The Bitcoin Latinum project operated from March to December 2021, promoting its token directly to investors as well as through two entities: Monsoon Blockchain Corporation and GIBF GP. Hundreds of investors purchased what the SEC considers unregistered securities totaling $16 million in the form of Simple Agreements for Future Tokens (SAFT) — granting the right to receive Bitcoin Latinum at a later date.
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The founder of Bitcoin Latinum promised that 80% or more of the funds raised through SAFT would be allocated to maintaining the base value of LTNM or directed to a foundational fund. In reality, Basile allegedly used the funds collected from investors for real estate and other purchases, including a thoroughbred horse for $160,000, according to the SEC.
The commission seeks to freeze the profits generated by the project along with interest until a court ruling is made, as well as an administrative penalty. The regulator is requesting the court to prohibit Basile from engaging in the issuance, purchase, offer, and sale of any securities, as well as to bar him from holding executive positions.
Last year, the SEC filed a complaint against the cryptocurrency company Unicoin, accusing it of illegally raising over $100 million through the offering of unregistered securities. Recently, the regulator pledged to refrain from pursuing cryptocurrency companies en masse in court but will focus on cases involving breaches of investor trust.
