3 ICOs have missed agreed repayment deadline with SEC: report – CoinGeek


Three initial coin offering (ICO) issuers have missed the agreed repayment deadline with the U.S. Securities and Exchange Commission (SEC). According to a Wall Street Journal report, the three companies promised to repay their investors after the regulator accused them of violating security laws. However, they are yet to follow through on their promises, with one of the companies being five months late already.

The first company is Airfox, a blockchain startup that was developing a mobile ecosystem focused on emerging markets. The company raised $15 million worth of digital currencies in its 2017 ICO. ParagonCoin was the other company, raising $12 million to develop a blockchain-powered cannabis ecosystem.

The SEC accused the two of violating securities laws by selling unregistered securities. They settled with the regulator and agreed to compensate their investors and pay a fine so as to avoid harsh penalties from the regulators. However, according to WSJ, they have yet to make the agreed payments.

The third culprit is Gladius, a blockchain startup that raised $12.7 million in 2017. The company was developing a distributed DDoS mitigation network on the Ethereum blockchain. Unlike the other two, Gladius self-reported to the SEC and agreed to compensate its investors and register its tokens as a security.

However, SEC’s co-director of enforcement Steve Peikin said the three have not kept their end of the bargain. Airfox and Paragon submitted the registration requirements, but according to Peikin, Paragon has failed to respond to a letter from the SEC inquiring about its accounting and shareholder rights. Paragon has also failed to issue quarterly updates for its investors, a requirement it agreed to when it registered its tokens with the regulator in March.

READ  Datum (CRYPTO:DAT) Reaches Market Capitalization of $848,856.00 - Modern Readers

The companies have also failed to compensate all their investors, a term they had initially agreed to. The deadline for this had been set for October 16. However, Airfox claims that its deadline has been extended till December 28. The SEC has yet to clarify its position on this extension.

The SEC believes that it’s possible the three lack the funds to settle their investors’ claims. The regulator’s documents show that Airfox owes $15.4 million to its investors but only has $6.1 million in assets. Paragon, on the other hand, owes its investors $14.9 million but its assets are claimed to stand at less than $100,000.

To receive the latest CoinGeek.com news, special discounts on CoinGeek Conferences and other inside information direct to your inbox, please sign up for our mailing list.



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here