The US Securities and Exchange Commission (SEC) has busted yet another initial coin offering (ICO), this time Tierion for issuing TNT tokens, for violations of securities law.
The regulator issued a cease and desist order against the blockchain company and ordered it to refund all tokens to investors. The data verification startup raised $25 million in July 2017 by selling 350 million TNT tokens.
Additionally, the company was fined $250,000 and have to disable trading of its tokens on the secondary market.
The SEC alleges that the TNT tokens fall under the category of securities, and Tierion did not register them with the regulator.
“While Tierion had been in business as a SaaS company since 2015, the Tierion Network was still in development at the time of the Token Sale. Reasonable investors would have understood that their money was funding the Tierion Network’s continued development,” the SEC noted.
Market Cap of Meme Cryptocurrency Dogecoin Spikes to Unprecedented LevelGo to article >>
The ICO investors and TNT holders have 60 days to approach the company for a refund on their investments at cost, with an interest. The node operators are allowed to sell their TNT holdings, received as compensations, back to Tierion for .01 cent plus interest.
It is to be noted that though the company agreed to the settlement with the regulator, it did not agree or deny any allegations.
The Project Will Continue
In a Medium post, Wayne Vaughan, Founder and CEO of Tierion, said that the project will go ahead despite the SEC’s order.
“This SEC settlement and waiver allows Tierion to complete the retirement of the TNT token, and to move forward without a heavy regulatory burden. This announcement does not impact the availability of Tierion’s current products or open-source software,” Vaughan noted.
Furthermore, the SEC is going after ICO mammoths with similar allegations of securities law violations. After successfully stopping Telegram and Kik for their blockchain initiatives, the watchdog has now sued Ripple for illegally raising $1.3 billion.