EOS Firm Block.one Fined $24 Million For Selling Unregistered Securities

October 3, 2019 / by Crypto.IQ

The SEC announced that it had handed EOS maker Block.one a $24 million civil fine for carrying out an unlawful ICO. The ICO reportedly generated close to $4.1 billion over one year between June 2017 and June 2018. 

Block.one did not admit to any wrongdoing but did not fight the charge and agreed to pay the $24 million fine for the sale of unregistered securities. The fine is nonetheless very small compared to the amount the company generated from the ICO.

An SEC release indicated that the company began the token sale before the SEC  released the DAO Report. The company reportedly continued selling the unregistered securities a year after the publication of the DAO report. Block.one allegedly didn’t secure any absolution from the requirements of securities registration and failed to register the sale.

According to Steven Peikin, the SEC Division of Enforcement co-director, Block.one also didn’t provide investors with the necessary information required in securities sales.

The company indicated in its statement that the settlement relates explicitly to the ERC-20 tokens they sold during the ICO, which are not in circulation anymore. In June of last year, the company swapped its ERC-20 EOS tokens with tokens from its own blockchain. The tokens do not require registration as a security with the agency since it has transitioned to a decentralized token that can trade on crypto exchanges. Block.one affirmed further that the settlement involves all ongoing issues between the company and the SEC.

The statement further indicated that the SEC granted the company an important waiver so it will not be subject to particular restrictions that apply with this kind of settlement. Block.one believes that the granting of the waiver by the regulatory agency is proof of the company’s commitment to best practices and compliance in the US and globally.

Don’t Miss out on top crypto trade secrets

join crypto iq
Essentials Package
only $9/month

Retail $97/month