A healthcare-focused blockchain firm has settled charges with the U.S. Securities and Exchange Commission (SEC) over its 2017 ICO.

The SEC said on Monday that New England-based SimplyVital Health, Inc. raised around $6.3 million in ether (ETH) via a pre-sale of its HLTH tokens to fund a touted “healthcare-related blockchain ecosystem” called Health Nexus.

The pre-sale was notably offered under a simple agreement for future tokens (SAFTs) arrangement – a model supposedly designed to simplify the ICO process and reduce the risk of enforcement actions by offering investment contracts rather than tokens. Following the pre-sale, which closed in April 2018, the firm did not move forward with the planned public offering.

The firm sold HLTH tokens that were “not be delivered to investors unless and until created by SimplyVital,” according to the SEC.

The commission ultimately ruled that the company had violated provisions of the Securities Act of 1933 by not registering the SAFT with the regulator prior to the offering and did not qualify for an exemption from registration.

SimplyVital complied with a cease-and-desist order from the SEC, while not “admitting or denying the SEC’s findings.”

By April 19, 2019, SimplyVital had voluntarily returned the bulk of the funds raised from investors – a factor that the SEC said it took into account when it decided not to impose civil penalties.

As reported in March 2018, industry sources had told CojnDesk that the SEC was likely going after SAFT sales.

One candid source said at the time:

“The SEC is targeting SAFTs. The new approach of the SEC is to consider tokens as both utility and security at the same time, meaning a token can bring utility to a platform but at the same time can be considered as a security if you sold it to parties that mainly looked for profit on its increase in value.”

SEC image via Shutterstock