The Crypto Roundup: 22 August 2023 | CryptoCompare.com

On Monday, the SEC announced charges against Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, for disseminating misleading advertisements that utilized hypothetical performance metrics. The SEC’s primary concerns revolve around Titan’s disclosures about the custody of clients’ cryptocurrency assets and other compliance failures.

From August 2021 to October 2022, Titan allegedly made deceptive statements on its website about hypothetical performance. This included advertising “annualized” performance results reaching up to 2,700% for its Titan Crypto strategy. The SEC claims these figures were misleading as they assumed the strategy’s initial three-week performance would persist throughout the year. Furthermore, Titan reportedly violated the SEC’s marketing rule, amended in December 2020, by promoting these hypothetical metrics without implementing the necessary policies and procedures.

The SEC’s findings also revealed that Titan provided inconsistent information to clients about how it managed the custody of their cryptocurrency assets. Additionally, Titan’s client advisory agreements contained misleading liability disclaimer language, and the firm did not have policies regarding employee personal trading in crypto assets. Titan also self-reported its failure to obtain client signatures for specific transaction types.

Osman Nawaz, Chief of Enforcement’s Complex Financial Instruments Unit, emphasized the importance of accurate disclosures, especially when marketing intricate strategies. He stated that Titan’s misleading advertisements are a cautionary tale for all advisers.

To settle the charges, Titan has agreed to a cease-and-desist order, a censure and will pay $192,454 in disgorgement, prejudgment interest, and an $850,000 civil penalty, which will be distributed to affected clients.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/aug/22/