The U.S. Securities and Exchange Commission fined two ICO issuers for mislabeling securities with utility token

18 Nov 2018

Two Initial Coin Offer (ICO) issuers, CarrierEQ Inc. and Paragon Coin Inc, was found in breach of the security law in the United States. The U.S. Securities and Exchange Commission ruled that companies when selling its 'utility tokens' were actually selling securities. Utility tokens are 'tokens which are intended to provide digital access to an application or service' (by FINMA classification). Companies are to return the funds to harmed investors, register its tokens as security, and pay $250.000 penalties. In a press release The U.S. Securities and Exchange Commission's Co-Director of the Enforcement Division stated: “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,”

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