Stockholders Were Given Specious Information About Bitmain's Financing Round
The investigation that was conducted by CoinDesk reveals that shareholders were influenced to devote money to Bitmain Ltd.
The company specializes in cryptocurrency digital services. The shareholders decided to invest in the firm after they were given false information. They were deceived into believing the entity had received the support of Digital Sky Ltd.
The information was misleading but CoinDesk was not able to confirm if the company's versions were genuine. However, Bitmain did not answer several queries concerning their production and distribution. Further investigations reveal that both of them had the corporation’s title and a privacy caveat on each side. Additionally, the two versions had banking guidelines and an approved time limit.
One of the pitches was translated from Chinese to English. The wording of these versions were also different in each language but had been structured in English. It stated that Bitmain had recently obtained a sum of $400 million in part of a financing worth $12 billion from shareholders. The issue was discussed on social media platforms for some time. CoinDesk discovered mistakes in the financial records two months ago. Afterwards, Jan Wootten clarified via their address that DST international had not invested in Bitmain. a GIC spokesman also denied similar allegations in the subsequent month when he commented on the issue.
Probable Legal Penalties
Several participants in the crypto industry accused Bitmain of spreading specious information after CoinDesk disseminated its report. Investors who suffered losses might consider taking legal action against Bitmain Technologies. Due to the fact that they were beguiled to invest in the corporation since there was no element of free consent in their decision.
If Bitmain is found to have participated in the false advertisement, it may be punished by the market watchdog. They might be suspended from the industry for engaging in such an illegality. In addition, their license may be revoked in order to discourage other companies from engaging in such activities.
Depending on the discretion of the SFC, the entire Bitmain top officials may serve a jail term of seven years. The corporation will also pay a fine of HK$1 million and monetary compensation who suffered losses because of the misleading statements.
SEC regulatory body will take action against people who raise money from the public through illegal means. They can only escape liability if they had reasonable grounds to believe that the information that was released to the public was true at that time.
In future, it is important for the investors to exercise caution before committing their resources on digital assets. The measure will help in safeguarding them from experiencing loss in future.