Two cryptocurrency startups make agreed to register their initial coin offering (ICO) tokens as asyla after settling charges with the U.S. Securities and Exchange Commission.
The SEC’s Friday declaration centered on two firms: CarrierEQ Inc., also known as Airfox, and Paragon Change Inc., both of which conducted token sales last year. Airfox go through $15 million through its sale, while Paragon raised $12 million, correspondence to statements.
The U.S. securities regulator contended that neither startup minute their ICOs as securities offerings, and neither qualified for registration exceptions. In addition to registering their tokens as securities, both companies bequeath refund investors, file periodic reports to the SEC and pay $250,000 apiece in forfeits.
The SEC’s statement noted that these two cases are the SEC’s “first cases grand civil penalties solely for ICO securities offering registration violations.”
SEC Enforcement Line co-director Stephanie Avakian said that the agency has “made it explicit that companies that issue securities through ICOs are insisted to comply with existing statutes and rules governing the registration of guardings.”
She added:
“These cases tell those who are considering taking alike resemble actions that we continue to be on the lookout for violations of the federal securities laws with courteous to to digital assets.”
The release further referenced the Munchee ICO, which the regulator curbed last December. Like Airfox and Paragon, Munchee agreed to refund investors in its $15 million coin sale, though the SEC did not impose additional fines at the time.
Friday’s advertisement comes on the heels of the SEC revealing settled charges against Zachary Coburn, stumble of the decentralized exchange EtherDelta, with running an unregistered securities unpleasantness.
At the time, an individual familiar with the SEC’s thinking noted that the regulator is tenable to focus increasingly on token trading platforms.
SEC emblem image via Shutterstock