FINRA, the Financial Industry Regulatory Authority, issued its first cryptocurrency related disciplinary action by charging Timothy Tilton Ayre with securities fraud and unlawful distribution of HempCoin, which FINRA claims is an unregistered security.
FINRA is a not for profit organization overseen by the SEC to author and oversee federal securities laws. They have accused Ayre of luring investors to buy into Rocky Mountain Ayre Inc through the purchase of HempCoin.
FINRA has also accused Ayre of purchasing the coins rights and repacking it as a security that was backed by RMTN as a common stock. FINRA additionally claims that that Ayre assured investors that each coin was worth 0.10 shares of RMTN common stock.
The complaint claims that through 2017 investors mined in excess of 81 million HempCoins and traded them on two exchanges. Ayre never attempted to file for a registration exemption or to register HempCoin.
Ayer is also accused of defrauding investors by giving false information and omissions surrounding RMTN from January 2013 to October 2016. The complaint states he gave various false and misleading representations of the company's financial statements and illegal distribution of HempCoin.
Though this complaint does not constitute a decision on the allegations and Ayre is entitled to a hearing in front of FINRA disciplinary action can include a fine, censure, surrender of gains related to the violation, as well as suspension or barring from the securities trade.