U.S. regulator settles with tech startups over token sale violations By Reuters

By Katanga Johnson

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission settled charges on Friday with two technology companies for improperly offering digital tokens, mandating that they register their offerings as securities and reimburse investors.

The action marked the first time the SEC has imposed penalties against tech startups that skirt the regulator’s rules through “initial coin offerings.” It also marks a ramping up of the SEC’s vigorous oversight of the cryptocurrency space.

The regulator had warned in March that it would hold most token offerings to the same standards as securities offerings, and impose fines on bad actors that violated securities laws.

After raising a combined $27 million from investors, CarrierEQ Inc (Airfox) and Paragon Coin Inc agreed to pay investors back, and each will pay $250,000 in fines as part of the settlement, the regulator said in a statement.

“Airfox expects to continue growing its blockchain platform within a regulatory framework,” the company said in a statement.

The companies didn’t admit or deny the SEC’s charges, but both agreed to file periodic reports for at least 12 months.

“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,” said Stephanie Avakian, one of the SEC’s enforcement chiefs.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.