The SEC wants to stop Veritaseum ICO operators from dissipating from what it described as an illegal offering.

The Veritaseum ICO isn’t what it was cracked up to be.

In what feels like a daily occurrence, the regulators have frozen assets over an alleged ICO fraud scheme.

The SEC filed an emergency lawsuit in federal court to prevent Veritaseum from spending $8 million in ICO capital. The agency is trying to preserve that portion of the $14.8 million that the firm raised in 2017 and 2018.

A 29-page complaint charges Reginald Middleton, a self-described “financial guru” behind the Boom Bust Blog,and two of his entities with violating the registration and antifraud provisions of the U.S. federal securities laws.

The SEC also alleges that Middleton also violated antifraud provisions on the basis of manipulative trading.

The SEC’s complaint alleges that “Middleton and the defendants marketed and sold securities called “VERI” tokens on the internet, inducing retail investors to invest based on multiple material misrepresentations and omissions.”

The complaint continues:

“Defendants allegedly knowingly misled investors about their prior business venture and the use of offering proceeds, touted oversized – but fictitious – investor demand for VERI, and claimed to have a product ready to generate revenue when no such product existed,” the SEC complaint says.

Veritaseum ICO Money Reportedly Moved After Warning

The SEC also alleges that Middleton manipulated the price of the VERI tokens trading on an unregistered digital asset platform.

According to a report from FinanceFeeds, the SEC informed the defendants’ that the commission was likely to take action against Middleton on July 30.

A day later, the defendants allegedly moved about $2 million in capital to blockchain addresses under their control and used some of that money to purchase precious metals.

“After learning about Middleton’s transfer of funds, we took quick action to prevent the further dissipation of investor assets,” said Marc P. Berger, Director of the SEC’s New York Regional Office.  “Whether in digital currency or plain cash, we will act to protect investor assets and to pursue fraud and manipulation in our securities markets.”

The SEC’s complaint is the latest in a string of actions against ICOs.