|Nov 17, 2018 03:00 PM||By: John Patrick Mullin | 3235 Views|
The Securities and Exchange Commission (SEC) fined two startups performing illegal ICOs $250,000 and obliged them to provide refund opportunities to their investors.
The SEC has made another move on crypto firms. In a recent press release, they announced the settlements they’ve built with two crypto startups, Paragon and Airfox.
Both startups are charged with $250,000 fine for failure to register their tokens as securities, along with many other obligations due for execution. Among them, the most important one would be giving an opportunity to all affected investors to request a refund.
Quoting the press release, “The orders impose $250,000 penalties against each company and include undertakings to compensate harmed investors who purchased tokens in the illegal offerings. The companies also will register their tokens as securities according to the Securities Exchange Act of 1934 and file periodic reports with the Commission for at least one year. Airfox and Paragon consented to the orders without admitting or denying the findings.”
Just a recap, Paragon successfully sold $12 million in the form of PRG tokens, but as of writing time, the market cap is just a little over $4 million. It also turned out that the company was once threating to sue CCN for publishing an article that questioned about Paragon ICO over a year ago.
Steven Peikin, SEC Enforcement co-director believes their actions towards unregistered ICOs performed by Paragon and Airfox will “stimulate” other companies to register their ICOs prior to the execution, by saying, "...these orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws."