The U.S. Securities and Exchange Commission (SEC) announced it has entered into settlement discussions with Reggie Middleton, organizer of the $14.8 million Veritaseum (VERI) initial coin offering (ICO).

In a filing with the New York Eastern District Court, published Oct. 2, the regulator said discussions with the defendants have taken place ahead of a pretrial conference.

This announcement comes on the heels of two settlements with the SEC over unregistered digital securities offerings. On Oct. 1, data storage startup Sia negotiated a $225,000 settlement over its $120,000 raise. On Sept. 30, EOS maker Block.One agreed to pay a $24 million penalty on a raise that totaled $4.1 billion.

According to the initial complaint, Middleton claimed VERI tokens were not securities and willingly mislead investors about the token’s potential value. He obfuscated his business plan and at several times referred to the tokens as “software” or compared them to prepaid gift cards to be used on a technological platform.

Middleton was further accused of manipulating the securities’ value post-ICO, and misappropriating at least $520,000 of investors’ money for personal use.

In 2017, Middleton claimed a hacker stole $8 million of funds raised during the ICO. The funds are still missing.

In an emergency action in August, the regulator froze Middleton’s assets and asked the court to ban him from operating a public company or participating in a digital asset securities offering.

On Oct. 8, Magistrate Judge Ramon E. Reyes reschedule the pre-trial conference for Nov. 14, to allow the parties to devote their resources to settlement.

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Eastern District of New York Courthouse image by Nikhilesh De for CoinDesk