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If you lost money in token sales, you may be in for a pleasant surprise. The Securities and Exchange Commission has ordered refunds for two initial coin offerings, after concluding that their tokens were actually unregistered securities. Paragon (PRG) and AirToken (AIR) have promised to return investors’ money, register the tokens as securities, and to pay penalties.

Airfox, which raised $15 million in its ICO, is now down 93% with a total market capitalization of $1.4 million. Paragon, which attempted to develop a blockchain ecosystem for the cannabis industry, is widely regarded as a flop. After a $12 million dollar ICO last October, the total market capitalization is now under $3 million.

Today’s announcement marks the first penalty against non-fraudulent ICO’s, the SEC noted in a press release, indicating signs of a wider crackdown on “utility tokens” as unregistered securities.

“We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities,” said Stephanie Avakian, Co-Director of the SEC’s Enforcement Division. “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.”

The SEC has been clear on the obligations of ICO issuers to register their securities or claim exemptions since its report on TheDAO, in 2015. But those cautions did not stop the flood of ICOs in 2017, some of which took advantage of easy pickings from inexperienced ICO investors.

By ordering the companies to reimburse their investors, the SEC may be attempting to send a strong signal to other cryptocurrency projects. The body has already ordered $400,000 in disgorgements and penalties against EtherDelta, as Crypto Briefing previously reported.

Airfox, the company behind AirToken, and Paragon have each been ordered to pay a $250k in penalties, the SEC says.

“By providing investors who purchased securities in these ICOs with the opportunity to be reimbursed and having the issuers register their tokens with the SEC, these orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws,” said Steven Peikin, Co-Director of the SEC’s Enforcement Division.

AirToken is a token for users to transfer mobile phone airtime. Paragon is a token for… cannabis? The use case was never very clear, although at one point the celebrity-led cryptoflop was being touted as a way to create marijuana-friendly business spaces. US rapper The Game joined forces with a reality TV show personality, Jessica VerSteeg, to promote the token, which was initially bankrolled by her husband, Russian millionaire Egor Lavrov.

Both Paragon and AirToken were widely-considered in the crypto world to be poor investments.

Paragon even featured in a Crypto Briefing glossary of crypto bubble terms:

“When Moon – example usage ‘Paragon TO THE MOON!!!! Oh wait, I just lost all my money.”

The author is not invested in any token mentioned in this article but owns other digital assets.