Titan Global Capital Management Settles with the SEC, Agrees to $1 Million Fine for Misleading Crypto Fund Claims
The New York-based fintech investment adviser, Titan Global Capital Management, has agreed to comply with the US Securities and Exchange Commission's (SEC) cease-and-desist order and paid fines exceeding $1 million for misleading investors about its cryptocurrency offering.
On Monday, August 21, the regulatory body stated in a press release, "SEC Charges FinTech Investment Adviser Titan for Misrepresenting Hypothetical Performance of Investments and Other Violations," that Titan had provided contradictory information to its clients regarding the custody of crypto assets.
The SEC revealed that the company had posted deceptive statements on its website that relied on "hypothetical performance," contravening the SEC's revised marketing regulation from December 2020. This marked the inaugural instance of charges being brought under this rule.
The SEC's announcement indicated that Titan had assured investors of potential "annualized" gains reaching up to 2,700% through its Titan Crypto strategy, launched in August 2021.
However, the firm had not disclosed that these returns were extrapolated from a theoretical three-week period during which no actual trading had occurred—essentially, the returns were fabricated.
Additionally, they neglected to establish suitable employee trading policies before October 2022.
"The order also finds that Titan violated the marketing rule by advertising hypothetical performance metrics without having adopted and implemented required policies and procedures or taking other steps required by the Commission's marketing rule, which was amended in December 2020."
In a statement, SEC senior enforcement officer Osman Nawaz said, "The Commission amended the marketing rule to allow for the use of hypothetical
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