05 Nov 2019
The US SEC ICO crackdown continues, with the regulator continuously resolving one case after another. The most recent ruling of the regulator concerns a blockchain company known as Veritaseum, whose ICO previously managed to raise $14.8 million.
The company's CEO, Reggie Middleton, announced yesterday that he agrees with the decision and that the company would return up to $8 million to its ICO investors. Furthermore, Veritaseum will also have to pay another $1 million to the state, which was one of the terms of the settlement with the SEC.
The information about the settlement comes directly from a court document, as produced by the New York Eastern District Court.
However, the SEC did not stop with requests to pay the settlement and return the funds — the regulator also permanently banned Middleton and his company from ever again offering securities. According to SEC, the offering of securities was illegal, which makes each of the company's investors a victim of a fraud.
Middleton did not accept these allegations, but he also did not deny them. He simply agreed to pay back the required sum, and pay the cost of the settlement.
As mentioned, Veritaseum originally managed to raise a significantly higher amount of $14.8 million. The funds came during a token offering, which the SEC named illegal, after filing a lawsuit against the firm back in August.
In order for anyone to sell securities legally, they are obligated to register with the regulator, as required by the US federal law. Now, tokens such as Veritaseum's VERI are considered 'investment contracts' by the regulator, as stated through enforcement actions and public statements. This makes them securities in the eyes of the SEC, and since they were sold without previously being registered, they are also illegal.
Of course, this is far from the biggest token sale that the SEC has deemed illegal in the last few years. Only last month, the regulator announced that the ICO held by Block.one also sold securities, and had illegally earned billions of dollars. Similarly to Veritaseum and its CEO, Block.one also did not deny or accept the charges. They simply agreed to pay the fine, which SEC estimated at $24 million.
As for VERI, the token's worth was at around $23,82 about a month ago. However, the negative publicity and the lawsuit itself took it down to its current worth of $17,18. However, the token currently participates in the crypto market's latest surge, with a 14.83% growth in the last 24 hours, It also grew by 13.76% against BTC and 14.36% against ETH.
It is also ranked quite high on the list of largest cryptocurrencies, occupying 228th spot at the time of writing, with a market cap of $37 million. Meanwhile, its trading volume in the last 24 hours sits at $31,500. Of course, its price is still far away from its all-time high of $475, which was the token's price back in January 2018.
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