Crystal World Holdings Clarifies No Crypto Plans After SEC Cites Blockchain Discussion

News | June 28, 2024 By:

On Friday, June 14, 2024, Crystal World Holdings, Inc. (CWH) filed a response to the Securities and Exchange Commission’s (SEC) motion for final judgment in an ongoing lawsuit.

In its response, CWH rebutted several factual claims made by the SEC in its motion. The SEC is seeking disgorgement of $1.4 million in alleged profits from CWH and the New Sports Economy Institute (NSEI) related to the operation of an online platform called the All Sports Market (ASM).

CWH argued that the SEC’s disgorgement figure far exceeds any actual profits made by the companies. It said revenues for CWH and NSEI over the relevant period totaled only around $1.8 million. Disgorgement of $1.4 million would amount to over 200% of total revenues.

CWH also took issue with several characterizations made by the SEC regarding the ongoing involvement of CWH’s former CEO Christopher Rabalais. It provided documentation showing Rabalais relinquished all roles at CWH and NSEI on January 1, 2023, and has had no involvement since new CEO Chad Deihl took full control of the website and related activities on January 16, 2024.

In its response, CWH also denied SEC claims that the companies have discussed bankrupting themselves or morphing the ASM platform into a separate company owned by Deihl. It called such suggestions “absolutely false.”

The response refuted as well the SEC’s assessment that CWH’s intellectual property portfolio has significant value, possibly worth millions. It noted CWH had been unable to sell its main asset, a game called Own the Game, when it was listed for $199,900 last year.

On the technological front, CWH clarified that while it was looking generally at blockchain technologies, it had no plans to migrate the ASM platform to a crypto blockchain or accept crypto payments. Such a move, it argued, would run counter to testimony provided by CWH executive Alper Ozgit during his deposition.

“It has nothing to do with crypto, purely the technology side of it. There are no plans whatsoever around accepting crypto payments or anything of the sort,” the company said.

In closing, CWH asserted the SEC has failed to approximate any profits from the alleged violations reasonably. It argued the burden of proof should therefore not shift to the defendants.

Please contact BlockTribune for access to a copy of this filing.