SEC Brings Down Two Crypto Startups For Illegal ICOs
According to a press release from the Securities and Exchange Commission two crypto startups, Paragon and another company doing business as Airfox have reached settlements with the agency for failure to register their tokens as securities. It has been a crime in the United States since 1934 to sell virtually anything that can resemble an investment contract without first registering with the SEC or applying for an exemption.
Each firm has agreed to a settlement of $250,000 and all affected investors in either company have an opportunity to request a refund.
The SEC press release on the subject reads:
“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 pursuant 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.”