Cryptocurrency investors establish reimbursements after the SEC has established itself with start-ups

IInvestors who invested in two cryptocurrency startups last year could benefit from repayments following an agreement with the US Securities and Exchange Commission.

The basic regulator solved a case against two companies that raised tens of millions of dollars by selling tokens in what is known as the initial money supply.

Paragon Coin and CarrierEQ were both hit with fines after failing to register their own tokens – cryptographic resources similar to cryptocurrencies – with regulators. Both companies are now required to compensate investors who still hold tokens or have sold them at a loss.

The agreement, which is the first time that civil sanctions have been issued against initial offers of coins, is the last chapter of a battle between regulators and the cryptocurrency community.

The ICOs, as they are known, have raised billions of dollars for companies that issue cryptographic tokens to investors in the hope that they will increase in value, just like stocks in an initial public offering. The practice has been seen by some as a way to circumvent regulation related to raising capital through banks or venture capital.

The settlement follows a series of recent cases in which the regulator began to repress the practice. Last year, the SEC stopped an ICO from a cryptographic initiation Mungee before it was fully underway.

Samuel Dibble, partner of the law firm Baker Botts, said that the agreement was regulated by the execution, and it is still unclear what the rules should be followed by the ICOs.

"Coins and tokens are subject to securities fraud and these provisions make it clear," he said. "We are still waiting for an affirmative action on what is the regulatory process allowed, do not move the ball forward, the SEC is still telling us only what you can not do".

Paragon Coin raised about $ 12 million in its ICO to develop its business by applying blockchain technology to the cannabis industry. CarrierEQ Inc, otherwise known as Airfox, has raised about $ 15 million to fund an app for users in emerging markets to earn and trade tokens.

Neither company registered its ICOs in accordance with federal securities laws, nor was it eligible for an exemption from registration requirements, the SEC said. In addition to offering a refund to buyers, the SEC imposed a fine of $ 250,000 against each company.