Investors who invested in two cryptocurrency startups last year could be eligible for refunds following a settlement with the US Securities and Exchange Commission.

The based regulator settled a case with against two companies that raised tens of millions of dollars selling tokens in what is known as an initial coin offering.

Paragon Coin and CarrierEQ were both hit with fines after failing to the register sales of its tokens - cryptographic assets similar to cryptocurrencies - with regulators. Both companies are now required to offer to compensate investors who still hold the tokens or who sold them at a loss.

The settlement, which is the first time that civil penalties have been issued against initial coin offerings, is the latest chapter in a battle between regulators and the cryptocurrency community.

ICOs, as they are known, have raised billions for companies who issue crypto tokes to investors in the hope that it increase in value, much like stock in an initial public offering. The practice has been seen by some as a way to bypass regulation attached to capital raising through banks or venture capital.

The settlement follows a series of recent cases in which the regulator has begun to crack down on the practice. Last year, the SEC halted an ICO by a crypto startup Munchee before it was fully underway.