Altcoin News: EOS Developer Pays $24 Million Fine for Unregistered ICO at SEC Request

October 1, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

Block.one, the developer of the EOSIO blockchain protocol, will pay a $24 million fine for unregistered sale of securities.

As reported by the Securities and Exchange Commission (SEC), Block.one “raised the equivalent of several billion dollars over approximately one year. The company agreed to settle the charges by paying a $24 million civil penalty.”

SEC notes that Block.one decided to conduct a token sale after the regulator published an investigation on The DAO, in which it indicated the presence of possible signs of securities in digital tokens.

“A number of US investors participated in Block.one’s ICO,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. “Companies that offer or sell securities to US investors must comply with the securities laws, irrespective of the industry they operate in or the labels they place on the investment products they offer.” “Block.one did not provide ICO investors the information they were entitled to as participants in a securities offering,” said Steven Peikin, Co-Director of the SEC’s Division of Enforcement.

Block.one agreed to pay the fine without acknowledging or challenging their guilt. In total, at the ICO, the EOS developer managed to raise $4.1 billion, and the amount of the fine imposed is less than 1% of the amount collected. In addition, the company published a press release on its website in which it said that SEC’s allegations apply to the ERC20 token issued by it and sold on the crowdsale.

“The settlement relates specifically to the ERC-20 token sold on the Ethereum blockchain during the aforementioned period, which is no longer in circulation or traded, and will not require the token to be registered as a security with the SEC. The settlement resolves all ongoing matters between Block.one and the SEC,” the company writes.

Block.one also states that the SEC has granted it exemptions from certain restrictions that are usually applied in such cases.

“We are excited to resolve these discussions with the SEC and are committed to ongoing collaboration with regulators and policy makers as the world continues to develop more clarity around compliance frameworks for digital assets,” they added.

Author: Marko Vidrih