A Princeton-based company allegedly sold more than $400,000 in unregistered securities in the form of cryptocurrency, New Jersey Attorney General Gurbir Grewal claimed in a new lawsuit.
The complaint, filed Wednesday, accuses Pocektinns Inc. and its president, Sarvajnya Mada, of offering and selling unregistered “PINNS Tokens” to raise funds for developing a blockchain-driven online marketplace. In January, the company sold $410,000 of PINNS Tokens to 217 investors, the state said.
The state also alleges that Mada acted as an unregistered agent and that the company employed an unregistered agent in violation of New Jersey’s securities law.
Neither Pocketinns or Mada could be reached for comment.
Pocketinns tried to raise up to $46 million by selling up to 30 million PINNS Tokens in exchange for another cryptocurrency called Ethereum, or “Ether,” according to the complaint filed in New Jersey Superior Court in Essex County. One Ether is currently worth $280, but it was valued at $728 at the time of the sale.
The state claimed that Pocketinns and Mada failed to ensure that its investors were accredited, thus requiring the PINNS Tokens to be registered with the state Bureau of Securities. Only 11 of the 217 investors who purchased PINNS Tokens provided documents showing they were accredited, according to the state.
Cryptocurrencies are a medium of exchange that are created and stored electronically using blockchain, a public database that keeps a record of digital transactions. Unlike traditional currency, cryptocurrencies are often not backed by tangible assets or a centralized agency.