SEC claims Titan made ‘conflicting disclosures’ about custodied crypto assets

Titan failed to implement policies around employee crypto trading

article-image

Mark Van Scyoc/Shutterstock modified by Blockworks

share

The US Securities and Exchange Commission announced charges against Titan Global Capital Management claiming that it made misleading disclosures due to compliance failures around client crypto assets.

Titan agreed to a cease-and-desist order, a censure, and will pay over $1 million which includes an $850,000 civil penalty and over $190,000 in prejudgment interest. However, according to a press release, Titan did not admit to or deny the SEC’s filings.

Under the SEC’s amended marketing rule, Titan did not provide material information when advertising hypothetical performance. 

The rule, amended in 2020, requires advisers to “standardize certain parts of a performance presentation in order to help investors evaluate and compare investment opportunities, and will include tailored requirements for certain types of performance presentations.”

The Monday press release claims that the violations occurred between August 2021 and October 2022.

Additionally, the SEC claims that Titan “made conflicting disclosures to clients about how Titan custodied crypto assets.” It also failed to “adopt policies and procedures” centered on personal trading in crypto for employees.

“The order also states that Titan self-reported to the SEC staff that it failed to ensure that client signatures were obtained for certain types of transactions in client accounts and agreed to settle related charges,” the SEC’s press release said.

The SEC alleges that Titan advertised an annualized performance result of up to 2,700% for the Titan Crypto Strategy, which the SEC claims was a misleading statement.

“Titan’s advertisements and disclosures painted a misleading picture of certain of its strategies for investors. This action serves as a warning for all advisers to ensure compliance,” said Osman Nawaz, chief of enforcement’s Complex Financial Instruments Unit.

Titan did not immediately respond to a request for comment.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit