Investors may think that blockchain-based initial coin offerings are a modern, innovative way to make some money, but they can also be used to perpetuate “old-school frauds,” according to Robert A. Cohen, chief of the agency’s cyber unit.

He’s quoted in an agency announcement that charges David T. Laurance and Tomahawk Exploration with fraud related to an initial coin offering (ICO) to fund an oil exploration and drilling venture in California.

Laurance and his company attempted to raise money for the venture through the sale of blockchain-based digital tokens called “Tomahawkcoins,” by promoting inflated projections of oil production; suggesting the company owned drilling leases when it did not; and claiming the  ‘flawless background” of Laurance, who had been convicted previously of securities fraud.

Tomahawk also claimed that token owners would be able to convert the coins into equity and potentially profit from oil production and the secondary trading of the token.

“Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs,” said Cohen in a press release.

(Related: SEC Names Cryptocurrency Czar)

Tomahawk and Laurance were charged with violating the registration and antifraud provisions of the federal securities law and Laurence was fined $30,000. Without admitting or denying the charges, Laurence  consented to a cease and desist order and to being barred from serving as an officer or director of a company and from involvement in the penny stock business.

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In addition to the charges announced against Laurence and Tomahawk Exploration, the SEC issued an Investor Alert to encourage investors to check the background of anyone selling or offering an investment. The alert links readers o previous SEC warnings about “all or nothing investment schemes,” when investors can lose all the funds they put in if the investment turns against them, and about initial coin offerings and digital assets.

(Related: Bitwise Files for First ETF Based on a Cryptocurrency Index)

The SEC’s position on ICOs depends on its use. According to previous statements by Chairman Jay Clayton, if cryptocurrencies are replacements for several currencies such as the dollar, it is not a security, but if tokens or digital assets are used to raise funds from investors in return for a potential profit they are a security that the SEC will regulate.