Regulation
block.one Agrees to $24M Settlement with SEC
Settlement
A long battle between block.one and the SEC has finally found a resolution. The case, which saw the SEC accuse block.one of illegally distributing digital securities, saw a final settlement of $24 million, and a ‘Neither Admit nor Deny’ stance.
Charged
These charges date back to an ICO surrounding an ERC-20 based token that raised $4.1 billion. Unfortunately, at the time, block.one neglected to register the event with the SEC. By failing to do so, the event represented the distribution of unregistered securities, which is obviously not allowed.
ERC-20 Migration and Waivers
The tokens sold during this event have been migrated to a different blockchain, meaning they are no longer in circulation. With this being the case, along with the on-going efforts of block.one to remain complaint with regulations, the SEC has granted them a waiver, moving forward.
Block.one indicates that this waiver will exempt the company from ongoing scrutiny in their operations – which is typical for companies that reach similar settlements; meaning most must endure a sort of ‘parole’, post settlement, ensuring continued compliance.
Commentary
In response to the settlement, both, the SEC and block.one took the time to share their thoughts. The following is what each had to say on the matter.
Steven Peikin, Co-director at the SECs Division of Enforcement, stated,
“Block.one did not provide ICO investors the information they were entitled to as participants in a securities offering…The SEC remains committed to bringing enforcement cases when investors are deprived of material information they need to make informed investment decisions.”
block.one stated,
“We are excited to resolve these discussions with the SEC and are committed to ongoing collaboration with regulators and policy makers as the world continues to develop more clarity around compliance frameworks for digital assets…Blockchain’s ability to better align organizations with their consumers, increase the transparency of critical database infrastructure, and better distribute value and wealth throughout society remains our company’s focus, and we will continue to fight for the development of our industry to achieve as much alignment around policy and best practices as possible.”
Block.One
Headquartered in Grand Cayman, Cayman Islands, Block.One is a software publisher which was founded in 2016. They, notably, are the developers of the popular EOS cryptocurrency.
CEO, Brendan Blumer, currently oversees company operations.
In Other News
Various companies have recognized the need for greater clarity, regarding what constitutes a security, with regards to blockchain. This has resulted in the formation of the Crypto Ratings Council. This is a grouping of companies which have developed a framework, meant to assess the likelihood that an asset will be deemed a security by the SEC. With companies such as block.one, Kik, Ripple, and others enduring the wrath of the SEC, this framework is a welcome addition to the sector, moving forward.
