Fintech investment adviser Titan Global Capital Management has agreed to pay over $1 million to settle Securities and Exchange Commission charges that it misled clients about cryptocurrency performance and asset custody.

The SEC said New York-based Titan touted hypothetical annualised Crypto Returns as high as 2,700% on its website between August 2021 and October 2022. However, these were based on a “purely” hypothetical three-week period with no actual trading.

The regulator said Titan failed to inform clients the figures were extrapolated from this brief hypothetical period. The firm also made conflicting statements to investors regarding the custody of crypto assets under management.

In addition, Titan did not adopt appropriate policies governing employees’ personal crypto trading activities, the SEC found. The agency has been investigating whether investment advisers meet rules around client digital asset custody.

Without admitting or denying the findings, Titan agreed to pay over $1 million to settle the charges. This includes returning ill-gotten gains and interest of $192,000 to affected clients, as well as a $850,000 penalty.

The firm’s misstatements about hypothetical crypto returns and unclear custody policies violated anti-fraud provisions, the SEC said. The episode illustrates heightened regulatory scrutiny of crypto asset management practices.