Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

U.S. regulator settles with tech startups over token sale violations

Published 11/16/2018, 02:04 PM
Updated 11/16/2018, 02:04 PM
© Reuters. FILE PHOTO: The U.S. Securities and Exchange Commission logo

By Katanga Johnson

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission settled charges on Friday with two technology companies for improperly offering digital tokens, mandating that they register their offerings as securities and reimburse investors.

The action marked the first time the SEC has imposed penalties against tech startups that skirt the regulator's rules through "initial coin offerings." It also marks a ramping up of the SEC's vigorous oversight of the cryptocurrency space.

The regulator had warned in March that it would hold most token offerings to the same standards as securities offerings, and impose fines on bad actors that violated securities laws.

After raising a combined $27 million from investors, CarrierEQ Inc (Airfox) and Paragon Coin Inc agreed to pay investors back, and each will pay $250,000 in fines as part of the settlement, the regulator said in a statement.

"Airfox expects to continue growing its blockchain platform within a regulatory framework," the company said in a statement.

The companies didn't admit or deny the SEC's charges, but both agreed to file periodic reports for at least 12 months.

"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," said Stephanie Avakian, one of the SEC's enforcement chiefs.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.