Will ICO investors get compensation? U.S. regulators reach agreement with companies

Author: Luo Tao

The U.S. Securities and Exchange Commission (SEC) has reached a settlement with the blockchain startup Enigma MPC over allegations of violations of securities laws, which raised $ 45 million in coin sales in the 2017s.

The U.S. Securities and Exchange Commission today announced a settlement allegation against blockchain technology startup Enigma MPC, alleging an unregistered securities offering in the form of an initial coin offering (ICO).

Enigma, with offices in San Francisco and Israel, has agreed to return funds to damaged investors through a claims process, register its tokens as securities, file periodic reports with the SEC, and pay a $ 500,000 fine.

Under an SEC order, Enigma raised approximately $ 45 million in 2017 by selling its digital assets, known as ENG Coin. The SEC's order identified ENG as a security, so Enigma was not registered as a securities issue under the federal government and was not eligible for the exemption from the registration requirements.

"All investors have the right to obtain certain information about the issue of securities from the issuer, whether it involves traditional or novel assets," said John Dugan, executive deputy director of the Securities and Exchange Commission's Boston Regional Office. "The remedies in today's order provide ICO investors the opportunity to receive compensation and provide investors with the information they are entitled to when making investment decisions."

The Securities and Exchange Commission order requires Enigma to stop its implementation or cause any violation of the registration requirements of the federal securities laws and pay a fine of $ 500,000. Enigma agreed to a claims process that will cause the company to return funds to investors who bought tokens in the ICO. The company will also register its ENG tokens as securities and submit periodic reports to the Securities and Exchange Commission. Enigma agreed with the order but did not acknowledge or deny the findings of the Transaction Commission.

It is reported that Engima will establish claims procedures in the near future. The company's chief executive, Guy Zyskind, said in a statement that the settlement was the end of a series of extensive discussions with the Securities and Exchange Commission.

"[It] provides our development team with the energy and the path to restore our original and ongoing vision: build groundbreaking privacy solutions, improve the adoption and usability of decentralized technologies, and benefit everyone. . "

He said the settlement agreement also enabled the Engima team to focus on its actual agreement, including launching its mainnet last week.

The company claims that the Enigma mainnet was launched on February 13 and currently has more than 20 validators. Its mainnet is based on the Cosmos SDK and is protected by a new coin called "secret".

Enigma is now looking for a "legal compliance path" to exchange its Ethereum-based ENG token for a new SCRT token.

"We are continuing discussions with our legal counsel and regulators to determine effective means to facilitate swaps that comply with all relevant securities regulations. However, our team cannot proceed at this time. We appreciate your patience and will work for you Provide up-to-date information as things go, "the company blog wrote.