Cannabis Crypto ICO Investors Will Finally Get Some Of Their Money Back

Cannabis crypto ICO investors will finally get some of their money back as the SEC was getting ready to hit the platform with a penalty so let’s read more in our latest crypto news today.

After the Paragon Cannabis crypto ICO project went up in smoke, the investors were hit the hardest.
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Paragon aimed to use the blockchain to help the cannabis industry function better but now the SEC called its ICO an unregistered securities sale. In April 2020, ParagonChain went bust as the decentralized solution for the cannabis industry raised $12 million in a 2017 ICO as they filed for bankruptcy after being pursued by the SEC for an unregistered securities sale.

The legal move, the fonders’ physical move to Eastern Europe meant investors in the project are left with almost nothing to show for their investment. The SEC said that it is starting a process of distributing the $175,000 Paragon paid in civil penalties to the investors. ParagonChain was a part of the ICO boom of 2017 which was the first year when Filecoin collected $257 million with Tezos receiving $232 million and DOT acquiring $145 million to build new blockchains. Paragon took a modest $12,066,000 worth of BTC, ETH, and other cryptocurrencies in exchanges for its PRG token as a part of a presale and crowd sale which ended in 2017 in September.

Paragon started by Jessica VerSteeg and her husband Egor Lavrov, wanted to use blockchain to bring bigger transparency to an under-regulated industry while creating the perfect climate for cannabis businesses that cannot access traditional banking services. Dispensaries cannot accept credit or debit cards directly because of regulation which why some governments want to solve it. However, things went south because the marketing strategy didn’t pay off and it caught the SEC’s attention in all the wrong ways.

Later, Paragon settled with the SEC and agreed to return the investors’ funds and paid a $250,000 fine while registering PRG as security. By late 2019, the investors began suing the company, and later in April 2020, Paragon made it official and announced via its website that was filing for bankruptcy:

 “We never considered ourselves experts in the matter of US securities, therefore we sought out the guidance of highly recommended lawyers that were supposed to help, unfortunately, they misguided and failed us. We did our best to launch the product, but most of our resources were allocated to legal battles and compliance requirements.”