The United States Securities and Exchange Commission (SEC) has settled charges against two companies for not registering their Initial Coin Offerings (ICO) of digital tokens as securities pursuant to the federal securities laws.
These settlements are part of the first enforcement proceedings brought by the SEC that impose civil penalties on companies solely for ICO securities registration violations. Previous cases involving penalties also involved fraud charges. These two new cases demonstrate the SEC’s position in relation to all ICOs. They emphasize the obligation of ICO companies to register tokens as securities pursuant to the federal securities laws and to comply with existing statutes and rules governing the registration of securities. The co-director of the SEC’s enforcement division stated that the SEC is vigilant against violations of the federal securities laws with respect to digital assets.
The settlement requires the companies to return funds to harmed investors, register their tokens as securities, file periodic reports with SEC and pay a fine of a quarter of a million dollars each.
CLICK HERE to read the SEC’s press release.