The two companies — Paragon Coin and CarrierEQ — came to settlements with the U.S. Securities and Exchange Commission and will each have to pay fines of $250,000. In addition to returning funds to investors, the two companies will have to file financial statements and other documents that give prospective investors a window into the health of the business, a first for an ICO case.
“We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities,” Stephanie Avakian, co-director of the SEC’s Enforcement Division said in a statement. “These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”
Paragon, which raised $12 million in a August 2017 ICO and CarrierEQ raised $15 million in an October 2017 ICO. Both companies are to provide refunds to investors.
