Enigma MPC, a blockchain technology startup based in San Francisco and Israel, reached a settlement agreement with the Securities and Exchange Commission (SEC) over its alleged unregistered initial coin offering (ICO).
The federal securities regulation filed administrative proceedings against Enigma after discovering that the blockchain startup raised around $45 million by selling 75 million digital assets called ENG Tokens to investors in an ICO.
Enigma offered and sold the ENG Tokens as investment contracts, therefore it is considered securities. The blockchain tech startup failed to register its ICO with the SEC. Its conduct violated certain provisions of the Securities Act.
Enigma agreed to return funds to investors and pay a penalty
On Wednesday, the SEC announced its intention to accept Enigma offer to settle the charges filed against it.
Under the settlement, Enigma agreed to return funds to investors harmed by its ICO. Investors will be able to get their money back through a claim process.