Block.one, the blockchain technology venture, will have to fork out $24m for settling its legal issues with the US Securities and Exchange Commission (SEC).
The SEC has previously charged the company for conducting an unregistered initial coin offering (ICO) between June 2017 and June 2018. The ICO raised several billion dollars over that time. The company agreed to settle the charges by paying the civil penalty of $24m. It consented to the order without admitting or denying its findings.
The ICO was stated to have been raised to pay for the Block.one’s general expenses and the development and promotion of its blockchain technology.
Block.one landed in hot waters because it did not register its ICO as a securities offering pursuant to the federal securities laws. Moreover, it failed to qualify for or seek an exemption from the registration requirements.
“A number of US investors participated in Block.one’s ICO,” said Stephanie Avakian, co-director of the SEC’s Division of Enforcement. “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.”
The rules around the ICOs have tightened around the world over the past few years. For instance, regulators in the EU and Australia have both revealed they will look closer at ICOs in the future.
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