The United States Security and Exchange Commission(SEC) has recently launched a Scrutiny wave to monitor ICO’s for unregistered token sales. According to the warning report released by the United States SEC, ICO’s issued after December 2017 will fall under the scan. If any ICO is found to fall under the category of unregistered token sales, the same will be booked with credible charges.
BCOT caught by SEC:
One recent ICO that was caught under the scan, was Blockchain of Things (BCOT). BCOT was filed with charges for selling unregistered tokens around the end of 2017. The fine summoned upon the vietnam-based registered ICO is around $250,000 and the company has agreed to settle. The ICO genuinely registered in Vietnam is supposed to have raised near to $13 million in the US alone according to the SEC.
As a part of compensating, BCOT has agreed to return the funds to the investors. The tokens that were deemed unregistered by the SEC are now facing revamping and the company is planning on a re-release.
Why were they charged?
The BCOT tokens will be relaunched into the market as a registered asset, sources from the company confirms. The main allegations fired against BCOT by the SEC is that the company had failed to provide the investors with the information that they were entitles to receive as a security protocol. According to the report released by the SEC dated December 2017, it clearly mentions the test to determine if a test can be claimed as a registered entity or not. The report also highlighted certain token parameters where the sales of tokens may face serious sanctions making it uncomfortable to do business for many ICO’s. This breach in protocol seems to be the sole reason why the company is heavied with such a fine says, Carolyn M, Associate director of enforcement, SEC. Since the ICO had settled for compensation, they are permitted to resume business.
The list doesn’t end there!
BCOT wasn’t the only ICO project that was caught in the scan, some more prevalent ICO’s like the EOS also received a charge sheet for fines but were allowed to resume business.
Other similar ICO’s caught under the violation charges were let off with a cease and deceit order along with the return of funds to the investors.
The new sweep by the SEC makes the local laws unfavorable for the business of tokens endangering many start-up ICO’s into uncharted territory with many legal hiccups lurking behind, says sources.
