SEC shut down the Unikrn platform for its $31 million 2017 ICO, ramping up enforcement against unregistered securities as we are about to find out more in the latest cryptocurrency news.
The Securities and Exchange Commission or the SEC shut down Unikrn for the 2017 ICO that raised $31.4 million. Hester Peirce, the pro-crypto Commissioner objected to the enforcement action saying that they may set a precedent that could stifle further innovation. Unikrn will serve as an example for other ICOs that the agency is serious about the securities registration requirements which will continue to ramp up the enforcement.
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The SEC ordered that Unikrn payout “substantially all of the company’s assets” to investors and disable the token by requesting that UnikoinGold is delisted from exchanges in connection to the 2017 ICO.
Between June and October 201, Unikrn managed to raise up to $31.4 million via its Unikoin Gold initial coin offering that was supposed to fund a crypto-enabled eSpports betting platform. The Seattle-based company raised $10 million in the Series A and Seed rounds from Mark Cuban, Shari Redston, Ashton Kutcher, and Elisabeth Murdoch and others. Unikrn promised the investors they will try and get the UKG listed on exchanges and will increase the demand for the token through its yet-developed betting platform according to the SEC so the Commission found that UnikoinGold launched a security and investment contract but the company didn’t register the offering.
Unikrn agreed to settle the charges by paying the $6.1 million penalties which is almost all of the company’s assets to be distributed to investors through a Fair Fund. The company agreed to disable the UKG token and request the removal of the cryptocurrency from exchanges. The SEC Commissioner said:
“The Commission is effectively forcing the company to cease operations because of an allegedly improper offering of supposed securities.”
In addition to the SEC’s action, the Washington State Department of Financial institution is conducting investigations involving Unikrn and is in negotiations to resolve the issue according to the Securities Administrator Bill Beatty. According to blockchain attorney Jorge Pesok from Crowell and Morning LLP, the agency indicated that the platform filed a Form D for the pre-sale which was not entitled to the exemption from registration under SEC Rule 506. Chief of SEC Enforcement Division Kristina Littman said:
“This resolution allows us to return substantially all of Unikrn’s assets to already-harmed investors and includes measures to prevent future sales to retail investors, including the disabling of the tokens.”
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