Titan Global Capital Management has agreed to a cease-and-desist order by the SEC, along with censure and penalties after the agency pressed charges related to advertising and compliance failures.
According to the SEC, the New York-based firm made misleading claims on its website that were based on “hypothetical performance” in violation of the SEC’s amended marketing rule of December 2020. This was the first case of charges made under that rule.
Titan claimed “annualized” performance based on three weeks of data could lead to returns of up to 2,700% on its Titan Crypto product, which debuted in August 2021. The SEC found that the firm also made unclear statements about crypto asset custody and other policies and failed to adopt appropriate policies on employee trading in the period leading up to October 2022.
Titan is registered by the SEC and is a member of the Financial Industry Regulatory Authority. The firm self-reported some of the issues and cooperated with the investigation before agreeing to the SEC order, without admitting or denying the SEC findings. The SEC action also included $192,454 in disgorgement of ill-gotten gains with interest and a fine of $850,000 that will be distributed to affected customers.
The SEC has made tightened enforcement for crypto investment advisers a regulatory goal. It announced the new focus in a February statement from the Division of Examinations. It has also proposed changes to custody rules that could negatively impact cryptocurrency firms.
