TL;DR: EOS.IO software developer Block.one has been hit with a $24 million Securities and Exchange Commission (SEC) fine settlement for failing to register an initial coin offering (ICO).

Block.one Hit with $24 Million SEC Fine for Unregistered ICO

The SEC handed down a $24 million settlement against Block.one “for conducting an unregistered initial coin offering of digital tokens (ICO) that 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,” the regulator announced on 30 September 2019. The company didn’t admit guilt nor fight the charge.

Its ICO, lasting a year, 2017-2018, according to the agency claimed it raise funds for “general expenses, and also to develop software and promote blockchains based on that software.” That ICO, famous in cryptocurrency circles, raised “several billion dollars worth of digital assets globally, including a portion from US investors,” touting names like crypto veteran Dan Larimer and investors such as Brock Pierce.

The SEC charged Block.one with failure to register in accordance with federal securities law as a securities offering, and insisted it did not “qualify for [nor] seek an exemption from the registration requirements.” Reaction from enthusiasts varied from those essentially issuing I-told-you-so memes to those urging defiance. Many commented that the SEC settlement, though large, was considerably less than the reported near $4 billion raised by the company during its ICO. Still others chose nuance.

Really sad to see so many in the crypto world upset that @block_one_ wasn't fined *even more* by the SEC. They had $24m taken from them. Some of y'all are more like Elizabeth Warren than Satoshi Nakamoto. — Erik Voorhees (@ErikVoorhees) September 30, 2019

“Block.one did not provide ICO investors the information they were entitled to as participants in a securities offering,” Steven Peikin, Co-Director of the SEC’s Division of Enforcement explained in the announcement. “The SEC remains committed to bringing enforcement cases when investors are deprived of material information they need to make informed investment decisions.”

*This article has been updated to distinguish between how Block.one is the developer of the EOS.IO software the EOS Public Blockchain is built on, and that the EOS Public Blockchain was created, launched, and maintained by the EOS community, not Block.one.

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