Blockchain Startup Agrees to Return Funds and Register Tokens As Securities

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By Emily Zulz

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.

The securities and investor-protection lawyers at the Morgan & Morgan Business Trial Group are part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices.

Our securities attorneys help investors recover their monetary losses on a contingency basis, so we are only paid if we successfully recover money for you. Our attorneys have helped investors recover tens of millions of dollars of investment losses.