SEC Takes Action Against Crypto Platform Titan

Titan has agreed to pay over $1 million in penalties and disgorgement.

The Securities and Exchange Commission (SEC) has charged fintech investment adviser Titan Global Capital Management with fraud and misrepresentation for advertising unrealistic returns and using improper hedge clauses.

According to an SEC press release, Titan engaged in misleading behavior from August 2021 to October 2022. The company advertised a hypothetical performance of their services that could lead to annualized gains as high as 2,700%. However, the SEC claims that this figure was based on performances recorded over just three weeks and could have easily been the result of pumping a single cryptocurrency.

In addition to this misrepresentation, the SEC accused Titan of using improper hedge clauses that created the false impression that clients had waived non-waivable causes of action against the company. Titan also allegedly used customer signatures without their consent and misled investors regarding the custody of their assets.

Titan has reportedly cooperated with the SEC and, while not admitting or denying the allegations, has agreed to pay a civil penalty of $850k and $192,454 in disgorgement. The company has also accepted a censure and a cease-and-desist order. Osman Nawaz, the SEC’s Chief of Enforcement’s Complex Financial Instruments Unit, has warned other companies with similar strategies to take this lawsuit as a warning.

In recent months, the SEC has been cracking down on crypto platforms, filing numerous lawsuits against companies of varying sizes. These lawsuits have targeted major players such as Binance, Coinbase, and Gemini, as well as smaller companies like Titan Global Capital Management.