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A couple of cryptocurrency companies were ordered to offer money to investors who participated in their initial coin offerings, which should have been registered with the federal regulators, marking the last move in the government's attempt to regulate the market financial often unpredictable and fashionable.
The two companies – Paragon Coin and CarrierEQ – have reached agreements with the US Securities and Exchange Commission and each will have to pay fines of $ 250,000. In addition to returning funds to investors, the two companies will need to file financial statements and other documents that offer potential investors a window on the health of the company, a first for an ICO case.
"We have made it clear that companies that issue securities through ICO are required to comply with the statutes and existing regulations governing the registration of securities," said Stephanie Avakian, co-director of the SEC Enforcement Division. "These cases tell those who are thinking of taking similar actions that we continue to look for violations of federal securities laws over digital assets."
Paragon, which raised $ 12 million in an ICO in August 2017, uses the blockchain, the decentralized record retention technology, primarily linked to cryptocurrencies, to manage the supply chain monitoring for the marijuana. CarrierEQ, which is also known as Airfox and provides financial services in emerging markets, raised $ 15 million in an ICO in October 2017.
The SEC orders do not accuse the fraud companies and the companies have not admitted or denied the conclusions of the agreement. The SEC found that company tokens, the virtual currency used to support ICOs, should have been recorded as securities or investments that will make returns for investors in case companies succeed.
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