US authorities brought parallel cases over a $30 million blockchain ICO

U.S. authorities opened parallel civil and criminal cases on January 17, 2020 over a blockchain venture that allegedly obtained at least $30 million from investors while misrepresenting its leadership and technology adoption.

The Securities and Exchange Commission filed a complaint in the U.S. District Court for the District of New Jersey against Boaz Manor, Edith Pardo, CG Blockchain Inc. and BCT Inc. SEZC. Separately, the U.S. Attorney’s Office for the District of New Jersey announced that a federal indictment charged Manor and Pardo with conspiracy to commit wire fraud, three counts of wire fraud and one count of securities fraud.

The allegations had not been adjudicated on January 17, 2020. The criminal charges were accusations, and Manor and Pardo were entitled to the presumption of innocence. The SEC action likewise stated allegations that the agency would have to prove in court.

What the SEC alleged

The SEC complaint said the defendants conducted a fraudulent and unregistered offering of digital-asset securities, generally called BCT Tokens, between approximately August 2017 and September 2018. According to the filing, hundreds of investors in the United States and abroad supplied at least $30 million through the initial coin offering.

The stated fundraising purpose was to develop technology for hedge funds and other digital-asset traders. The complaint alleged, however, that investors received materially misleading information about Manor’s identity and criminal background, his control of the businesses, Pardo’s role, the management team and the extent to which hedge funds used the proposed technology.

According to the SEC, Manor operated under the name Shaun MacDonald and was presented as working for Pardo, while Manor actually controlled the enterprise. The filing alleged that this arrangement concealed Manor’s identity and prior Canadian criminal convictions. It also alleged that Pardo was portrayed as the owner and as the source of millions of dollars invested in the venture, although she did not exercise the represented managerial authority or supply the money as described.

Adoption claims under scrutiny

The enforcement records focused not only on who controlled the companies but also on claims of institutional traction. Prosecutors said CG Blockchain promoted ComplianceGuard as a blockchain-based auditing tool and later marketed Blockchain Terminal as a system through which hedge funds and financial institutions could trade and manage cryptocurrency.

The government alleged that prospective investors were told 20 hedge funds were using ComplianceGuard and paying annual fees of $1 million each. The SEC’s account was more specific about the surviving evidence: it said an early prototype had been sent without charge to approximately a dozen funds, but none used or paid for it. The complaint also alleged that claims describing the technology as operational and gaining significant traction were misleading.

Those details mattered because the offering was presented as financing infrastructure for professional digital-asset markets rather than a purely speculative token project. Claims about paying hedge-fund clients could therefore affect how investors assessed product readiness, revenue prospects and the credibility of the team.

Why the parallel actions mattered

The January 17 cases joined two enforcement theories around the same token sale. The SEC alleged violations of securities-registration and antifraud provisions and sought injunctions, disgorgement, interest, civil penalties, officer-and-director bars and restrictions on future securities offerings. Federal prosecutors pursued potential criminal liability based on the alleged scheme and use of interstate or foreign communications.

That combination demonstrated the institutional risk surrounding ICO representations in early 2020. Calling an instrument a token, or describing a product as blockchain infrastructure, did not insulate fundraising conduct from ordinary rules governing securities offerings and fraud. The record also showed that enforcement scrutiny could reach operational assertions—such as claimed customers, fees and executive control—not merely the technical classification of a digital asset.

No conclusion about investor recovery or the defendants’ ultimate liability was available from the January 17, 2020 filings themselves. The event-day record established charges, alleged conduct and requested remedies, not a judgment.