Blockchain Startup Agrees to Return Funds and Register Tokens As Securities

The Securities and Exchange Commission recently settled charges against a blockchain technology startup for conducting an unregistered initial coin offering (ICO).

Enigma MPC, a blockchain technology startup, has agreed to return funds to harmed investors. It also has agreed to register its tokens as securities, file periodic reports with the SEC, and pay a $500,000 penalty.

According to the SEC’s order, Enigma raised about $45 million from sales of its digital assets, called “ENG Tokens.” The SEC’s Order finds that ENG Tokens are securities, Enigma did not register its ICO as a securities offering under the federal securities laws, and its ICO did not qualify for an exemption from the registration requirements.

According to John T. Dugan, associate director for enforcement in the SEC’s Boston Regional Office, “All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones.”

If you’ve been the victim of a fraudulent or unregistered ICO scheme, contact one of our experienced securities attorneys.

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