ICO Enigma Settles SEC Charges of Unregistered $45 Million ICO

ICO Enigma Settles SEC Charges for selling $ 45 million unregistered tokens in 2017. The regulator said that under the settlement, Enigma would refund ” harmed investors”. ICO Enigma must register as securities with the SEC and file reports with the agency. It also has to pay an additional $ 500,000 as a penalty.

20 February, 2020 | AtoZ Markets – A group of MIT graduates launched the Enigma project. It offers a decentralized platform that allows users to create their own cryptocurrency hedge funds, providing investment data and strategies for traders. 

The regulatory status of cryptocurrency offerings, in general, remains somewhat obscure. However, the SEC has warned that securities law may apply to certain virtual tokens based on their specific characteristics. In these cases, registration, disclosure and other requirements apply.

ICO Enigma Settles SEC Charges

The SEC determined that Enigma was equivalent to selling securities without filing a registration or qualifying for a registration exemption.

The regulator announced that under the settlement, Enigma has to refund ” harmed investors” using a claims process. Enigma has to register its tokens as securities with the SEC, file reports with the agency and pay an additional penalty of $ 500,000. According to the SEC, in 2017, Enigma sold ENG tokens which were securities.

Before proceeding its token sale, hackers managed to breach the Enigma website and compromise a number of its social accounts. They managed to steal almost $ 500,000 worth of Ethereum by sending spam to users.

Read More: OneCoin Scam is Still Live in Asia

Enigma Is Looking to Swap ENG Token

The main network of Enigma, which launched on February 13, now has more than 20 validators, said the company. The main network is based on Cosmos SDK and secured by a new coin called “secret”, according to its blog. Enigma is now looking for “legal channels” to exchange its ENG token, which is built on ethereum, for its new SCRT token.

The SEC has taken enforcement action against a dozen companies, putting their offers on hold after issuing warnings. Besides, it froze the assets of several cryptocurrency companies, halted ICOs and suspended trading.

Last year, SEC fined ICORating for biased ICO reviews. The Commission also entered into a $ 269,000 settlement with an ICO rating company.

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