The SEC has accused New York-based investment adviser Titan Global Capital Management of failing to comply with disclosure regulations related to client cryptocurrency assets. The allegations pertain to inaccurate information provided about client crypto holdings.
The crypto-related charges relate to instances of non-compliance between August 2021 and October 2022, as detailed in an August 22 press release.
Furthermore, in response, Titan Global Capital Management has accepted a cease-and-desist order and an official reprimand. They will pay over $1 million, including an $850,000 civil fine and an extra sum of over $190,000 for interest prior to judgment.
The SEC highlights that Titan didn’t offer accurate data as per the 2020 updated marketing rules. These rules require financial advisors to show uniform and clear performance metrics, helping investors assess various investments. Regulators underscores that Titan omitted crucial details while presenting hypothetical gains and didn’t follow specific directions for distinct performance representations.
SEC Investigates Titan’s Crypto-Related Charges
The SEC’s concern also extends to how Titan communicated the custody processes for client crypto assets, raising doubts about accuracy. The Commission highlights that Titan lacked a robust framework to oversee personal cryptocurrency transactions made by its staff members.
Titan proactively informed the SEC about lapses in obtaining client approvals for specific transaction categories within client portfolios. This disclosure also involves reconciling the associated charges.
SEC Questions Titan’s 2,700% Yield Claim and Urges Compliance in Investor Communications
The SEC’s scrutiny also encompasses Titan’s marketing strategies. The SEC questions Titan’s claim of achieving an impressive annualized yield of 2,700% through its Titan Crypto Strategy, suggesting this could be a misrepresentation.
The SEC’s Complex Financial Instruments Unit leader highlighted the need for strict compliance among financial advisors. Titan’s promotions and disclosures, if not careful, might confuse investors.