Sand Hill Exchange, a virtual stock exchange that allowed people to invest in synthetic stocks in unlisted Silicon Valley start-ups has reached an agreement with the United States Securities and Exchange Commission and paid a fine of about to resolve the issues related to alleged law violations.
According to the statement released by the US Securities and Exchange Commission, the Boost VC accelerated company created a gamified version of stock exchange, similar to the e-sporting platforms. It allowed users to invest in the unlisted start-ups with Bitcoin. Soon after launching the platform the company was issued a cease and desist order by the SEC for violating the Section 5(e) of the Securities Act and Section 6(l) of the Securities Exchange Act of 1934.
The news of Sand Hill Exchange being under investigation got out early last month after the company decided to publish details of the inquiry on its blog. According to the SEC, Sand Hill was illegally offering complex derivatives products to retail investors outside the regulatory framework of the agency and it didn’t possess the required registration statements to conduct the business as they were. These shortcomings on the part of Sand Hill was noticed by the SEC in the early stage and the platform was shut down with before any damage was caused.
The founders of Sand Hill Exchange – Gerrit Hall, Warren Mar and Elaine Ou have neither admitted nor denied the allegations but they have chosen to comply with SEC’s cease and desist order. In a statement, Gerrit Hall has announced that he personally takes the responsibility for all the wrongdoings throughout the entirety of Sand Hill Exchange. The Exchange plans to continue its operations without involving real currency.
As part of the settlement, the founders of Sand Hill Exchange have agreed to pay the fine of $20,000 as penalties and they have signed an undertaking to cease and desist from committing or causing any violations of the securities laws in the future.
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