Two ICOs Settle With the SEC to Register their Tokens as Securities
Just yesterday, the 16th of November, the Securities and Exchange Commission (SEC)released a statement announcing that they had settled charges against two companies that carried out ICOs that fall under securities offerings. In the announcement, the SEC explained that both companies have agreed to return funds to harmed investors as well as register their tokens as securities. The two firms would also file periodic reports with the Commission and pay penalties.
The Two ICOs
The two firms cited by the SEC areCarrierEQ Inc. (Airfox) and Paragon Coin Inc. Both of these companies carried out ICOs in 2017. Airfox raised an estimated $15 Million worth of digital assets while Paragon raised approximately $12 Million.
Stephanie Avakian, Co-Director of the SECs Enforcement Division, had this to say about the two firms and the state of ICOs in the US.
We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities.
These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.
SEC Advises ICOs to Comply with Federal Securities Laws
Steven Peikin, Co-Director of the SECs Enforcement Division, added the following with respect to how ICOs should proceed with their funding activities:
By providing investors who purchased securities in these ICOs with the opportunity to be reimbursed and having 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 the federal securities laws.
Penalties By the SEC
The two companies were each fined $250,000. The two firms will also compensate harmed investors who purchased tokens in the illegal offerings. They will also register their tokens according to thethe Securities Exchange Act of 1934 and file periodic reports with the Commission for at least one year.
Airfox and Paragon agreed to comply with the SEC orders without admitting or denying the findings.
What are your thoughts on the two ICOs being ordered to register their tokens as securities? Please let us know in the comment section below.
The post Two ICOs Settle With the SEC to Register their Tokens as Securities appeared first on Ethereum World News.