SEC Charges North Carolina Resident for Conducting Fraudulent and Unregistered Offerings of Crypto Asset Securities

The Securities and Exchange Commission (SEC) has taken legal action against Alexander Elbanna and three entities under his ownership and control for their involvement in a fraudulent scheme related to unregistered offers and sales of crypto asset securities named “DWE” and “BPC.” Additionally, Elbanna and one of his entities are charged with fraudulent private offers and sales of equity securities.

As per the SEC’s complaint, the fraudulent activities took place between February 2018 and April 2021. During this period, Elbanna established and promoted three separate business ventures successively: Digital World Exchange, LLC, Boostedpro LLC, and D.W. Exchange, LLC. Each of these enterprises allegedly presented a crypto asset trading platform concept, along with an associated “in-house exchange token” or crypto asset security. The value of these tokens was purportedly tied to Elbanna’s successful launch of the proposed trading platform. To lure investors into purchasing DWE, BPC, and equity securities in the corporate entity issuing DWE, Elbanna and his three entities are accused of making false and misleading statements about Elbanna’s technological expertise and wealth, the risks associated with the investment, and the functioning of the related crypto asset trading platform. Consequently, investors reportedly lost over $1 million due to these deceptive practices.

The complaint has been filed in the U.S. District Court for the Middle District of Florida and charges Elbanna and his three entities with violations of Sections 5 and 17(a) of the Securities Act of 1933, as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. In a settlement, each defendant, without admitting or denying the allegations, has agreed to a bifurcated resolution, which includes permanent injunctions against violating the charged provisions, conduct-based injunctions, and monetary relief to be determined by the court at a later date upon the SEC’s motion. Furthermore, Elbanna has consented to an officer and director bar. These settlements are subject to court approval. Angela Elbanna is also named in the complaint as a relief defendant.