The US Securities and Exchange Commission (SEC) has come to a settlement with the company behind one of the largest Initial Coin Offerings of 2017 and 2018 – Block.one. EOS raised a total of $4 billion and settled for paying a fine of $24 million for running an unregistered ICO.
Block.one To Pay $24M Fine
The SEC has reached a settlement with the publisher of EOS, Block.one. Per the official release, the company has to pay a fine of $24 million for running an unregistered ICO. According to the federal securities law of the US, ICOs qualify as securities offerings and EOS has failed to seek an exemption from the registration requirements.
According to the Co-Director of the SEC’s Division of Enforcement, Steven Peikin, Block.one failed to provide investors with the information they were entitled to as participants in securities offerings.
Adding to the matter, Stephanie Avakian, another co-director of SEC’s DE said:
“A number of US investors participated in Block.one’s ICO. […] Companies that offer or sell securities to US investors must comply with the securities laws, irrespective of the industry they operate in or the labels they place on the investment products they offer.”
With all of the above said, the SEC’s order finds that the company has violated registration’s provisions of the federal securities laws and, as such, has fined it to pay the civil monetary penalty.
Block.one has agreed to pay the fine without admitting or denying its findings.
Perhaps somewhat unfortunate, the SEC doesn’t provide any clarifications on whether or not the issued token represents security but rather that the procedure for its issuance qualifies as a security offering.
As such, it remains unclear whether or not EOS is a security in the eyes of the commission. However, the SEC’s decision has certainly raised quite a lot of questions within the cryptocurrency community.
Number one, of course, is the amount of the fine. EOS raised around $4 billion during its token sale and the fine amounts to $24 million. Spun from a different perspective, one could say that the ROI for Block.one is around 16,500%.
In any case, one thing is clear, EOS is pumping on the news. Over the past 24 hours, EOS is up 9%, breaking back above $3.
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