Earlier this week, the Securities and Exchange Commission caused a stir by hitting the founder of EtherDelta, a decentralized exchange platform that offers services for Ethereum tokens. This had attracted the attention of several people involved in space as it was the first time that an SEC was examined by the Founder. This has also conveyed a strong message to the whole community, ie the developer will always be responsible for their innovation.
Now, the SEC has returned to the spotlight, knocking down two ICOs simultaneously. The projects that have been targeted by the SEC are Paragon Coin Inc. and CarrierEQ Inc [Airfox], both based on Ethereum and the ICOs were conducted in 2017.
The commission claims that ICO was conducted after publishing a report on their investigations into DAO aka the Digital Decentralized Organization Organization, the main reason for the splitting of the Ethereum blockchain. The commission added that, according to the DAO report, ICOs can be classified as stock offers.
In addition, Airfox has raised about $ 15 million of cryptocurrencies for the development of their project. The project launched by the team during the ICO was creating a tokenised ecosystem that allows users to earn tokens and exchange data tokens. While Paragon has raised $ 12 million of cryptocurrencies for the development of a product, introducing blockchain technology in the cannabis industry.
Since both ICOs were not registered under federal securities laws, the SEC imposed a fine of $ 250,000 each against both companies. In addition, they are required to compensate the "damaged investors" who took part in the ICO and have also filed a relationship with the SEC on a periodic basis for at least a year.
Stephanie Avakian, co-director of the SEC Enforcement Division, said:
"We have made it clear that companies that issue securities through ICO are required to comply with the statutes and the existing rules governing the registration of securities.These cases tell those who are thinking of taking similar actions that we continue to be seeking violations of the laws federal titles on digital resources ".
Steven Peikin, co-director of the SEC Enforcement Division said:
"By providing investors who purchase securities in these ICOs the opportunity to be repaid and the issuers register their tokens with the SEC, these orders provide a model for companies that have issued tokens in ICOs and seek to comply with federal laws. on the titles. "
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