Data Encryption Startup Settles SEC Charges for Unregistered Offering of Digital Tokens

Marco Green
February 21, 2020

Nonetheless, the launch of the Enigma Mainnet ensures that the venture will survive, since once a decentralized blockchain network is propelled it can't be brought down as long as nodes/validators keep making sure about the security of the network.

Enigma was blamed for not have registered its ICO with the SEC and also its conduct violated certain provisions of the Securities Act. It also points out that investors who purchased ENG tokens will have the right to request a refund with interest, however, those that are happy with their investment can hold on to their tokens.

The San Francisco and Israel-based startup agreed to pay a $500,000 penalty, return funds to investors via a claims process, register its tokens as securities, and file periodic reports with the SEC. Investors will be compensated through a claims process. Dugan said this applies to all assets, traditional or newer ones such as cryptocurrencies.

"The remedies in today's order provide ICO investors with an opportunity to obtain compensation". The start-up said the SEC agreement will allow them to focus on developing Enigma and its privacy solutions.

In general, this appears as though one of the ore positive instances of a SEC enforcement action against an ICO, since in this case the venture had the option to get to the goal of going live as opposed to being killed before the launch.

Enigma's mainnent is a Proof-of-Stake blockchain based on the Cosmos SDK/Tendermint. 'The initial validators of the Enigma mainnet are now the sole controllers of the network and the future changes shall be submitted as proposals and voted upon by the validators for addition. The core team of Enigma will work harder to improve the protocol's security, stability, and community governance.

Enigma themselves have stated that the issue being put to rest is good for them as it opens up new avenues for development. Enigma Mainnet Was Just Launched " We are continuing discussions with our legal counsel and regulators to identify an effective means of facilitating a swap that complies with all relevant securities regulations, but for the time being, our team is not able to proceed.

Other reports by Click Lancashire

Discuss This Article

FOLLOW OUR NEWSPAPER