The US Securities and Exchange Commission has intervened to stop an initial coin offering (ICO) that attempted to raise US$15m for a restaurant review app named “Munchee”.

The regulator served Munchee Inc. with a cease and desist order [PDF] to halt the offering on grounds it was an unregistered security.

Munchee tried to sell “MUN Tokens”, a form of digital currency that would be used by both reviewers and restaurants to unlock premium features in the app and to buy advertisements.

The idea behind the sale was that Munchee would use the $15m to grow its business and recruit more users, increasing the value of the MUN Tokens in the process and allowing the investors to resell the tokens for a profit.

The Commission (SEC) did not find that prospect appetising, or legal, and decided the ICO was a cryptocurrency investment in its own right aimed at speculators.

“Munchee and its agents targeted the marketing of the MUN tokens offering to people with an interest in tokens or other digital assets that have in recent years created profits for early investors in ICOs,” the SEC said in its order.

“This marketing did not use the Munchee App or otherwise specifically target current users of the Munchee App to promote how purchasing MUN tokens might let them qualify for higher tiers and bigger payments on future reviews. Nor did Munchee advertise the offering of MUN tokens in restaurant industry media to reach restaurant owners and promote how MUN tokens might let them advertise in the future.”

Because the tokens meet the definition of investment contracts, the SEC ruled the sale of tokens was an authorized securities transaction.

The commission said that upon receiving the order, Munchee halted the sale and ensured no tokens were distributed. Refunds have been issued to investors who ordered tokens. The SEC noted Munchee’s cooperation with the order in saying it would not impose any additional penalties.

The shutdown is the second major action announced this month by the SEC’s newly-created Cyber Unit, a group assigned to investigate and prosecute securities fraud in ICOs, distributed ledger tech, and social media.

The SEC also warned December 12th, that it was on the lookout for ICOs that looked and quacked and walked like securities, and intended to roast those who offer them.