Now, as per SEC’s order, Enigma is to cease and desist from committing any violations of the registration provisions of the federal securities laws. Enigma has also agreed to the claims process to return the investors’ funds who purchased the ENG tokens in the ICO and further registers them as securities.
SEC Brings Down Hammer on $45 Million 2017 ICO
Enigma MPC was accused of conducting an unregistered offering of securities via an initial coin offering (ICO) in which raised about $45 million from sales of its ENG tokens in 2017, as per SEC’s order.
SEC found that ENG tokens aren’t securities and they didn’t register its ICO as securities either in accordance with the federal securities law as its ICO did not qualify for an exception from the registration requirement.
“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones,” said John T. Dugan, Associate Director for Enforcement in the SEC’s Boston Regional Office.
“The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”
ENG Tanks as Enigma Agrees to SEC’s Order
The San Francisco and Israel-based company has now agreed to refund funds to harmed investors via claims process and pay a $500,000 penalty. The crypto project will also register its token as securities and file periodic reports with the SEC.
“Enigma consented to the order without admitting or denying its findings,” reads the statement.
As a result of the news, ENG token lost 33% of its value since yesterday while currently trading at $0.320.
Meanwhile, Mainnet Launched with “Secret” Token
Amidst all this, Enigma announced the launch of its mainnet. In a blog post, Enigma shared the news of reaching a settlement with the regulator and moving to the second part of the project stating,
“With this settlement behind us and the promising future of Enigma still ahead, we can again begin to push forward and meaningfully advance the Enigma protocol.”
The mainnet has been successfully launched which is operated by more than 20 independent validators. The proof-of-stake blockchain is based on Cosmos SDK/Tendermint and secured by yet another native coin Secret (SCRT) used for staking and transaction fees within the network.