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Nebulous agrees to SEC settlement over unregistered SiaCoins sale

Nebulous agrees to SEC settlement over unregistered SiaCoins sale

The United States Securities and Exchange Commission (SEC) has reached an agreement with Nebulous, the company behind the Sia decentralized cloud storage network.

October 2, 2019, | AtoZ MarketsNebulous Inc is a Massachusetts-based blockchain business company. It concluded a settlement agreement with the Securities and Exchanges Commission and will pay approximately $ 225,000 due to Sianotes’ unregistered offer in 2014 and their subsequent conversion to Siafunds in 2015.

Sia is one of Nebulous’s projects. It is a decentralized cloud storage network that works on a two-stroke model. Siacoins are used to buy and sell cloud storage space, and Siafunds, formerly known as Sianotes, to allow investors to receive a share of the total storage income.

According to the SEC filing, Nebulous conducted an unregistered offering of Sianotes in May 2014, accumulating $ 120,000. At the launch of the network in 2015, Sianotes were converted into Siafund tokens. In April 2018, Nebulous conducted another Siafunds offer, but regulatory changes led them to seek a securities consultant and ended up attending a Tokenized Securities Offering (TSO). According to the official declaration of SIA, the Nebulous team had not foreseen that the 2014 Sianotes offering would be considered in the future as an SEC security.

Shortly after the TSO, which was fully compliant with the SEC, the Commission launched an investigation into Nebulous. After the investigation, the SEC concluded that Siafunds was considered security and that the 2014 offering was a violation of Section 5 of the 1933 Securities Act. Nebulous, without denying or admitting the allegations, agreed to settle and will pay about $ 225,000 in penalties and disgorgement.

SEC reaches $24 million settlement with Block.one

The US SEC recently reached an agreement with EOS’s parent company – Block.one to pay a $ 24 million penalty for conducting an initial unregistered coin offer (ICO). 

US SEC mentioned: “Block.one raised the comparably billions of dollars but failed to register its ICO as a security offering following US federal securities laws. Nor did it qualify for or demand an exemption from the requirements of registration.”

In particular, the SEC has not taken any executive action against the Siacoin token or any other ongoing activity on the network. Nebulous COO Zach Herbert was quoted as saying ” while disappointed that the SEC has chosen to pursue a steep sanction of almost double that which we raised in our 2014 Siafunds offering, in particular with respect to their lax EOS management, We consider this agreement very positive for Sia. By not taking any action against Siacoins, we believe that the SEC has validated the Sia two-stroke model. We will rapidly continue to build and improve the Sia network.”

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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