SEC Settles Charges Against Enigma’s $45M Token Sale
- “Harmed investors” will have the options to receive a refund with interest through a claims process, or keep their tokens.
- The firm will also have to register its tokens as securities, file periodic reports with the SEC, and pay a $500,000 fine.
Securities and Exchange Commission symbol on a building. Money Crashers.
The United States Securities and Exchange Commission (SEC) has settled charges against Enigma MPC’s 2017 initial coin offering (ICO), the regulator said in a press release on 19 February.
According to the announcement, Enigma raised approximately $45 million in its 2017 ICO, which the SEC has labeled as an unregistered securities offering. The firm has now agreed to refund “harmed investors” through a claims procedure, register its ENG tokens as securities with the SEC, file periodic reports with the agency, and pay a $500,000 penalty.
In its own press release, published the same day, Enigma said:
“This settlement clears the way for our development team to focus fully on our original and continued vision: building groundbreaking privacy solutions that improve the adoption and usability of decentralized technologies, for the benefit of all.”
As per the order of the proceedings, the SEC classified the ENG tokens as securities, and noted that it did not receive any filing from Enignma for its tokens. It also points out that investors who purchased ENG tokens will have the right to request a refund with interest, however, those that are happy with their investment can hold on to their tokens.
The Associate Director for Enforcement in the SEC’s Boston Regional Office, John Dugan, said in the Wednesday press release:
“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones. The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”
A year after the completion of its ICO, Enigma partnered with the multinational corporation Intel on “research and development efforts to advance development of privacy preserving computation technologies”.
On Wednesday, the firm also announced that its mainnet was officially launched on 13 February, and claimed that it now has more than 20 validators. Enigma also said that the mainnet was based on Cosmos SDK and was secured by a new native coin, called Secret (SCRT). As its ENG token is built on the Ethereum blockchain, the company is now looking for “legally compliant avenues” to swap its tokens.
- The U.S. SEC, CFTC, and FTC have all filed separate lawsuits against bankrupt crypto lender Celsius and its former CEO Alex Mashinsky, charging them with multiple counts of fraud.
- Mashinsky was also arrested in New York on Thursday, and later charged by the Department of Justice with securities fraud, commodities fraud, and wire fraud.
Former Celsius CEO Alex Mashinsky on Centre Stage during day three of Web Summit, Lisbon, Portugal, 4 November 2021.Piaras Ó Mídheach/Web Summit via Sportsfile/Flickr
- The U.S. regulator has alleged that the platforms offered unregistered securities to the general pubic in the form of the BNB token and BUSD stablecoin.
- Binance was also accused of failing to register as an exchange, and that it had comingled funds between its global and U.S. platforms.
- Bankruptcy Judge Michael Wiles gave Voyager the permission to close its $1 billion deal with Binance.US, and issue repayment tokens to affected customers.
- Judge Wiles also rejected the SEC’s arguments that the deal could potentially violate U.S. securities laws, and criticized the regulator for attacking the sale without first concluding if it was illegal.