SEC fines Block.One $24 million for unregistered EOS ICO


Blockchain company, Block.one has agreed to settle and pay a fine of $24 million to the Securities and Exchange Commission for an unregistered EOS ICO.

October 1, 2019, | AtoZ Markets – The Securities and Exchange Commission (SEC) has announced in a press release that it has settled charges against blockchain builder Block.one for conducting an unregistered initial coin offering (ICO). The firm has agreed to pay a $24 million penalty without admitting or refute the findings.

Securities law catches up with Block.one

Block.one, the maker of the EOS blockchain conducted an ICO between 2017 to 2018 in which it raised $4.1 billion.  

However, the company, with has operations in Virginia and Hong Kong failed to register its ICO as a securities offering in agreement with the U.S. federal securities laws and did not “qualify for or seek an exemption from the registration requirements,” the SEC states.

A number of U.S. investors participated in Block.one’s ICO. Companies that offer or sell securities to U.S. investors must comply with the securities laws, irrespective of the industry they operate in or the labels they place on the investment products they offer,”  said Stephanie Avakian, co-director of the SEC’s Division of Enforcement.

The regulator, therefore, found that Block.one violated the securities laws and ordered the penalty. Steven Peikin, another co-director of the Division of Enforcement said:

“Block.one did not provide ICO investors the information they were entitled to as participants in a securities offering. The SEC remains committed to bringing enforcement cases when investors are deprived of material information they need to make informed investment decisions.”

Shortly after publication, Block.one issued the following statement on its website:

We are excited to resolve these discussions with the SEC and are committed to ongoing collaboration with regulators and policy makers as the world continues to develop more clarity around compliance frameworks for digital assets.

At the time of press, EOS price is up by 0.78% and trading at $2.989 as per data from CoinMarketCap
 
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