Block.one was fined $24 million, and the SEC opened the "toll booth" model?

On September 30th, the US Securities and Exchange Commission (SEC) published a document showing that the SEC has reached a settlement with blockchain technology company Block.one.

Earlier, the SEC raised an allegation against Block.one, which the SEC believes Block.one issued unregistered digital token EOS through ICO in about a year and raised billions of dollars. In response, Block.one agreed to settle the allegations by paying a $24 million civil penalty.

Block.one invests most of its liquid assets in US debt

According to documents published by the SEC, the investigation of Block.one was conducted jointly by Luke M. Fitzgerald and Tuongvy Le under the supervision of John O. Enright of the SEC Network Department and the New York Regional Office.

According to Caijing.com, Chain.com has completed a total of US$4.2 billion in financing through ICO in June last year. Then in July of the same year, equity financing was obtained from venture capitalist Peter Thiel, Bitland, Moore Capital Management founder Louis Bacon and hedge fund billionaire Alan Howard.

The SEC believes that although Block.one is an offshore company registered in the Cayman Islands in 2016, Block.one has opened offices in the United States and Hong Kong on a factual level, and part of the financing that Block.one has received. From American investors. Block.one does not register its ICO as a securities issue under the federal securities laws, nor is it eligible for registration requirements or seeking exemptions.

Stephanie Avakian, co-director of the SEC's executive division, believes: “Companies that offer or sell securities to US investors must comply with securities laws, regardless of the industry in which they operate or the investment products they offer. How is the label."

Therefore, the SEC found that Block.one violated the registration requirements of the federal securities law and required it to pay a civil penalty of $24 million. Block.one is willing to pay the fine, but has reservations about the SEC's findings.

The SEC’s allegations are not groundless, and the $24 million fine may be a piece of cake for Block.one.

In BB's interview with the media in November 2018, in the interview video, it was publicly acknowledged that the EOS project party cashed in the vast majority of the $4 billion raised, and converted most of the $4 billion ETH into French currency. management.

Regarding the direction of the capital of more than 4 billion US dollars, in addition to BB has repeatedly stated that it plans to invest 1 billion US dollars to lay out the EOSIO community and its ecology, Block.one or any related personnel will not give formal and detailed information on this. Information disclosure.

Chain Finance has sorted out some of the fragmented investment trajectories of previous Block.one and selective information disclosure. At present, Block.one holds assets including legal currency assets ($2.2 billion) and 140,000 BTCs (valued at approximately $1.12 billion). ), 100 million EOS (worth approximately $660 million), investment funds for ecological construction (approximately $1 billion), and previous cryptocurrency losses due to liquidity (approximately $500 million). The approximate estimate above is that the total value of assets held by Block.one is approximately $4.48 billion.

In addition, in an email sent to shareholders by Block.one in March this year, it mentioned that it held about $2.2 billion worth of liquidity legal assets, most of which were invested in US government bonds.

The SEC repeatedly passed a fine to settle

Interestingly, once the news was announced, EOS fell sharply by nearly 10%. In response to the incident, encryption analyst Alex Krüger said that on the factual level, the SEC issued a green light notice to the encryption company in the form of fines.

This is not the first time the SEC has abandoned allegations against blockchain-related companies after charging a fine.

On August 21, the SEC issued a notice showing that the cryptocurrency rating agency ICO Rating agreed to pay $269,000 to reach a settlement with the SEC. Earlier, the SEC alleged that ICO Rating did not disclose the compensation paid for the rating recommendation of the cryptocurrency project party.

In the survey, the SEC found that during the period from late 2017 to July 2018, ICO Rating paid for the release of ICO rating reports for certain project parties, and published reports and ratings through its main network and social media channels to promote the project. The SEC found that ICO Rating directly or indirectly charged a $10.05.72 project recommendation fee.

In response to this, in order to withdraw the SEC's allegations against it, ICO Rating agreed to pay a project recommendation fee of $10,072,000, a pre-judgment interest of $6,626, and a civil penalty of $162,000. After the settlement, ICO Rating's company employees will be exempt from SEC allegations.

The SEC stated that ICORating violated the anti-pedaling rules of Section 17(b) of the Securities Act of 1933, which requires that “anyone, using any means of transportation, means of communication or tools in interstate commerce, or by post, Promote or disseminate any notice, circular, advertisement, newspaper, article, letter, investment service or communication, even if there is no intention to sell the securities, describe the securities directly or indirectly from the issuer, underwriter or securities firm Remuneration, and insufficient disclosure of past or future remuneration and the amount of the amount, is illegal."

On August 9, the SEC reached a settlement with the blockchain project party PlexCorps (aka PlexCoin). The condition for the settlement is that the PlexCorps project will pay a fine of $4.56 million and interest of $350,000. In addition, the PlexCorps project sponsors Lacroix and Paradis-Royer were fined $1 million. Under the settlement agreement, Lacroix and Paradis-Royer each agreed not to participate in securities sales.

In December 2017, the SEC filed a lawsuit against the PlexCorps project and its sponsor, Dominic Lacroix, in the federal court in Brooklyn, New York, alleging that both sold securities named PlexCoin to investors in the US and elsewhere on the Internet, claiming PlexCoin investors. It will generate 1,354% of profits in one month. The SEC also said that Labrix partner Sabrina Paradis-Royer is also related to the plan.

Author: Financial Network Wu Yingjun

Source: Finance and Economics Network on Finance