NEW YORK—A fintech that promoting crypto returns of nearly 3,000% has been hit with a $1 million fine by the SEC.
The fintech, Titan Global Management, was advertising "annualized" returns on Titan Crypto of up to 2,700%, a number based on a "purely hypothetical account," according to the SEC>
Titan Global Capital Management provided investment strategies to clients and prospective clients solely through a mobile app, the SEC said.
Titan also “neglected to tell its retail investors that the 2,700% returns were extrapolated from a hypothetical period of just three weeks during which no actual trading occurred, The Register reported, citing the SEC order.
Forgot to Mention
According to the SEC order, “Titan did not disclose in the advertisements that the 2,700% annualized return was based on a purely hypothetical account in which no actual trading had occurred, that this annualized return had been extrapolated from a period of only three weeks (from August 10, 2021 to August 31, 2021), that the hypothetical return for this three-week period was calculated at 21%, that the projected 2,700% annualized return was based on the assumption that the Titan Crypto strategy would continuously generate a 21 percent return every three weeks for an entire year, or Titan's views as to the likelihood that this assumption would bear out.”
Additional Charges
Among other charges, the company is also accused of inserting a hedge clause that created a "false impression" to Titan Global Capital Management's retail clients, implying they had waived what are actually non-waivable causes of action provided by U.S. state or federal law, the SEC said.
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