Prosecutors have paused a United States Securities and Exchange Committee (SEC) lawsuit against the declared operators of a $thirty million fraudulent ICO amid concerns that proceedings may touch on the integrity of a parallel investigation into the defendants.

The United States chaser's office for New Jersey intervened in the case on Apr 2.

SEC suit paused amid integrity concerns over the parallel investigation

The SEC action against defendants Boaz Manor, Edith Pardo, and the associated companies CG Blockchain Inc and BCT Inc has been halted to maintain the integrity of parallel criminal investigations into the pair's scheme.

The prosecutors argued that the stay is needed to foreclose the accused from obtaining information under the broad rules of civil discovery that would otherwise be unattainable nether the narrow scope of criminal discovery.

"A ceremonious litigant should not exist permitted to proceed simultaneously with an overlapping criminal matter, because 'the similarity of the issues [leaves] open the possibility that [the defendant] might improperly exploit ceremonious discovery for the advocacy of his criminal case,'" the regime stated.

The SEC charged Boaz Manor, his business associate, and two companies, CG Blockchain Inc. and BCT Inc. SEZC, with violating federal anti fraud and securities registration provisions of the federal securities laws during January.

While Pardo was arrested and later released, Manor remains at large. However, both individuals' respective legal representation have consented to the staying of the complaint. The complaint was filed on January. 12.

From hedge fund embezzlement to ICO fraud

From 2022 until 2022, the pair allegedly made a serial of misrepresentations regarding CG Blockchain's operations — including fraudulently claiming xx hedge funds were paying leasing fees to the firm for a non-existent production called ComplianceGuard.

The pair are also believed to have lied well-nigh Manor's criminal groundwork — with Manor having served a 4-twelvemonth prison sentence for siphoning $106 one thousand thousand from a now-defunct Canadian hedge fund that he had co-founded.

In Baronial 2022, CG Blockchain launched an initial coin offering (ICO) to purportedly fund a product that the aforementioned 20 hedge funds had supposedly agreed to use. The ICO ended viii months later after absorbing roughly $30 million in crypto and fiat.