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Spanked by the SEC: Paragon and Airfox ICO

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The Securities and Exchange Commission has ordered penalties of $250,000 each against two Initial Coin Offerings: Paragon and Airfox.

SEC Orders against Paragon and Airfox

The Securities and Exchange Commission has ordered penalties against two Initial Coin Offerings: Paragon and Airfox. According to SEC, both the companies failed to register their ICO tokens as securities under the securities and exchange act 1929. Thus both companies Paragon and Airfox (CarrierEQ) have reached out for settlement with the agency where each of the company have to pay $250,000 to the securities and exchange commission. Notably, all the investors of the initial coin offerings have got an opportunity for a refund.

 

Press Release by SEC

According to the press release published by Securities and Exchange Commission, the agency has imposed a fine of $250,000 against Paragon and Airfox which includes the amounts which will be used to compensate the investors in both Initial Coin Offerings which are being termed as Illegal Offerings. Also, the agency has ordered both the companies to register their respective tokens as securities under the securities exchange act 1934.

 

Steven Peikin, the Co-Director of Securities and Exchange Commission Enforcement believes that the following action against both these companies will help the agency to encourage the other United States based Initial Coin Offerings to register with the federal securities laws.

#Exchange

Aftermath of EtherDelta Charges by SEC

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SEC’s swift action against the founder of EtherDelta does not appear to have had an immediate impact on cryptocurrency world.

SEC’s swift action against the founder of EtherDelta does not appear to have had an immediate impact on the crypto world.  As the non-fiat community awakens to the regulatory rap, crypto prices remained flat. With the sole exception of a few raised voices from Korean Bar Association on Thursday for the legalization of crypto activities and encourage mass adoption, there has not been much activism from the industry or user community in protest against the fine.

However, SEC’s enforcement moves do have a handful of lessons for the Decentralized exchange (DEX) community in particular.

 

Lessons Learnt from EtherDelta-SEC Confrontation – DEX should follow same rules

EtherDelta, the crypto token exchange has reached a settlement with the United States trade regulatory body Securities and Exchange Commission (SEC), following charges of operating the exchange without necessary approvals.  Zachary Coburn, the founder of the unregistered exchange, did not challenge SEC’s scrutiny and instead chose to pay penalties to the tune of $388,000, disgorgement as well as interests as part of the settlement.

Andrew Hinkes, New York University School of Law professor in his expert commentary of the deal, opines that EtherDelta operated as an exchange without the necessary legal endorsements from the council and the securities laws and implications and thus action and enforcement from SEC were but a question of time.

Thus the agreement arrived between EtherDelta and the SEC sets a precedent for new things to happen with respect to Decentralized Exchanges (DEXs).

 

DEX and SEC

The surprising part of the deal is that Coburn no longer works with EtherDelta, having quit the organization in 2017. However, since SEC was penalizing the organization and its executive members for the period of July 12, 2016, and December 17, 2017, Coburn is party to the settlement.

By penalizing the exchange, SEC has established the precedent that decentralized networks cannot be irresponsible or behave differently from centralizes server networks. Secondly, even if the business has ceased to operate or the owners have changed, SEC will enforce securities laws.

The penalty imposed is just a matter of routine and did not have any other penalties in terms of his participation in the markets. Experts believe by cooperating with the regulatory body, Coburn was able to win himself his favor, else it could well have led to his suspension or higher fines to be participating in the capital markets.

The third lesson is that the SEC wants the executives behind the actions of an organization are to set up the guidelines for such management leaders to work within the regulatory dimensions and not demand exceptions.

 

ICOs led to SEC aggressiveness

The year 2017 saw a proliferation of ICOs and tokens, especially in the US capital markets. Additionally, a plethora of Decentralized exchanges also began to set up a shot using, most commonly, assets which ran on the Ethereum network. These exchanges engaged in swapping of assets and thereby did not see the need for operating under a licensing system. Besides, they believed that being decentralized agencies they ruled themselves out of the centralized server-system framework regulated by SEC.

Thus, another lesson learned here is that the Ethereum platform – ERC20, when used cannot be considered as exempt by the exchanges from SEC obligations and compliance. Smart contract operations are also violating Exchange Act, states cyber law expert Hinkes. However, if Coburn and his group were alert and had kept out “certain tokens” their operations on ERC20 would not have been an issue states Hinkes.

 

Legal Labyrinth – the biggest Aftermath

Hinkes hints that the settlement between the likes of Coburn by the SEC now throws open the question of operations of organizations like EtherDelta. The question of unregistered securities sales and purchase is now open-ended in the USA, while overseas regulators are welcoming ICO and token use. The legal labyrinth remains the biggest aftermath post the legal settlement with Coburn.

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#SEC

SEC: Stop Blockvest ICO immediately

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The Securities and Exchange Commission (SEC) has reported on Thursday that it has gotten an emergency court order stopping an arranged ICO by Blockvest.

The Securities and Exchange Commission (SEC) has reported on Thursday that it has gotten an emergency court order stopping an arranged ICO by Blockvest. The Southern California Locale Court order likewise stopped a progressing pre-ICO sale by the company and its founder, Reginald Mate Ringgold, III, and in addition solidifying the litigants’ advantages.

blockvest ICO

As indicated by the ICO’s site, Blockvest (BLV) is an ERC20 token based upon Ethereum. “Blockvest Nvestnodes produce automated revenue through resource upheld profit sharing shrewd contracts. At it’s center, BLV is a security token that is representative of the best performing cryptocurrency index.”

As indicated by the SEC’s complaint, Blockvest and Ringgold, who additionally passes by the name Rasool Abdul Rahim El, were dishonestly guaranteeing their crypto subsidize was “licensed and regulated.” Blockvest and Ringgold likewise supposedly misrepresented Blockvest’s associations with an accounting firm.

“We affirm that this ICO is utilizing both the SEC seal and a made-up crypto regulatory authority to trap investors into trusting the ICO was approved by controllers,” said Robert A. Cohen, Chief of the SEC Authorization Division’s Cyber Unit. “The SEC does not underwrite investment products and investors ought to be very wary of any cases proposing something else.”

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#Scam

Another large bank Nordea, suspected of money laundering

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Nordea, the biggest bank in the Nordic region, is purportedly associated with being a piece of a noteworthy international money laundering outrage.

Nordea, the biggest bank in the Nordic region, is purportedly associated with being a piece of a noteworthy international money laundering outrage. The plan professedly included a Russian client and occurred over numerous years at an international branch of the bank that is currently shut.

 

Nordea Associated with Money Laundering

Nordic Region’s Biggest Bank Nordea Associated with Money LaunderingNordea Bank Abp (Nordea), a monetary administrations gather headquartered in Finland, is associated with money laundering, Cph Post Online gave an account of Tuesday. The biggest bank in the region is purportedly engaged with money laundering that occurred somewhere in the range of 2010 and 2013 “in the bank’s presently shut international branch for worldwide clients in Vesterbro [in Copenhagen, Denmark],” the distribution nitty gritty, including:

Nordea is associated with being a piece of a noteworthy international money-laundering embarrassment including a Russian client and an assessment organization.

 

Nordic Region’s Biggest Bank Nordea Associated with Money LaunderingThe news outlet expounded that “For very nearly four years, the fraud squad has attempted to seek after a criminal body of evidence against a Russian client and an organization in Belize in Focal America, associated with having ‘washed’ roughly 322 million Norwegian kroner [~$39 million] utilizing bank accounts in Nordea.”

Built up in 1820, Nordea at present has around 300 banks with branches, backups, and delegate workplaces in 17 nations. As per its site, the bank professes to have 1.7 million clients in Denmark, 2.8 million in Finland, 0.9 million in Norway, and 4.2 million in Sweden. “Nordea is the biggest monetary administrations assemble in the Nordic region and one of the greatest banks in Europe,” the bank portrays itself.

 

Reaction to Supposed Money Laundering

Nordic Region’s Biggest Bank Nordea Associated with Money LaunderingFollowing reports of its supposed money laundering contribution, a Nordea spokeswoman told Reuters in an email on Thursday, “To the best of our insight, Nordea isn’t under scrutiny from experts related to money laundering in the Baltics.”

Julie Galbo, Nordea’s central hazard officer, was cited by Cph Post Web-based conceding that the bank’s “anti-money laundering systems at Nordea had been deficient previously and guaranteed that significant changes have been made as of late.”

 

Jakob Dedenroth Bernhoft from Revisorjura, whose work centers around money laundering, remarked:

Nordea has been a decent bank to open a record at in the event that you need to launder money. The bank did not examine unusual exchanges.

 

As of late, Danske Bank has experienced harsh criticism for professedly laundering around $234 billion through its Estonian branch. Reuters revealed the biggest bank in Denmark saying Thursday that it has “got demands for information from the U.S. Department of Justice (DOJ) regarding a criminal investigation identifying with the bank’s Estonian branch.”

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