The United States Government is seeking to intervene and stay an action brought by the Securities and Exchange Commission (SEC) against Amir Bruno Elmaani, also known as Bruno Block.

As FX News Group has reported, the SEC brought charges against Elmaani, the creator of the “Pearl” cryptocurrency, in December 2020. Now, the Government wants the civil action paused until the conclusion of the related criminal proceedings.

In a motion filed with the New York Southern District Court on January 21, 2021, the Government explains that the criminal case arises from the same set of facts and circumstances that underlie the SEC’s action. As a result, a full stay is appropriate because any exchange of discovery in the SEC’s action would be asymmetrical and would merely allow the defendant to circumvent the criminal discovery rules and improperly tailor his defense in the criminal case.

Counsel for Elmaani has informed the Government that Elmaani consents to the Government’s request for a full stay. Counsel for the SEC have informed the Government that the SEC takes no position on the Government’s request for a stay.

Let’s recall that the SEC’s complaint charges Elmaani with conducting an illegal securities offering of digital tokens and minting millions of unauthorized tokens for himself at no cost and selling them into the secondary market, thereby causing the value of others’ tokens to plummet.

As alleged in the SEC’s complaint, in the fall of 2017, Elmaani offered and sold tens of millions of Pearl tokens in connection with his venture, Oyster Protocol. According to the complaint, the Pearl tokens were securities, but Elmaani’s offer and sale of Pearl tokens was not registered with the Commission.

The complaint alleges that Elmaani unlawfully raised approximately $1.3 million through his unregistered sale of Pearl tokens. The complaint also alleged that, on or around October 29, 2018, Elmaani used a web of digital wallets to covertly mint approximately four million unauthorized Pearl tokens for himself for free and immediately began selling the tokens in the secondary market.

Elmaani allegedly made approximately $570,000 in illicit gains through the minting and sale of Pearl tokens and, as a result of his sales, the price of Pearl tokens fell by nearly 65%, resulting in significant losses for investors.

The SEC’s complaint charges Elmaani with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.