SEC Charges Crypto Founder Basile Over $16M Fraudulent Token Offering

The U.S. Securities and Exchange Commission filed a complaint against crypto executive Donald Basile and his companies GIBF GP Inc. and Monsoon Blockchain Corporation for allegedly conducting a $16 million fraudulent securities offering. According to the SEC, Basile offered investors Simple Agreements for Future Tokens (SAFTs) purporting to provide access to a cryptocurrency asset called Bitcoin Latinum (BTCL or LTNM) upon meeting specified milestones.

Alleged False Claims

The SEC alleges that Basile made multiple false statements to investors. He claimed that LTNM was the world's first insured digital asset with up to $1 billion in coverage from an international insurance broker and risk adviser, despite no insurance company ever issuing a policy for the cryptocurrency. Additionally, Basile falsely stated that LTNM was backed by a basket of digital assets when the token had no asset backing whatsoever.

Misuse of Investor Funds

Basile represented that at least 80% of SAFT offering proceeds would support LTNM development or be placed in an underlying fund. According to the SEC, this did not occur. Instead, the agency alleges that Basile used investor funds for personal benefit. Specifically, the SEC states that Basile spent $4.1 million to purchase a condominium in Miami, Florida; $2.8 million for a house in Park City, Utah; $1.4 million to pay his personal American Express card; and $160,000 to purchase a horse for his daughter.

Current Status

According to the SEC's complaint, after selling SAFTs to hundreds of investors, Basile stopped promoting LTNM. The SEC states that LTNM is now valueless and many investors have lost their entire investment.