In the current bearish crypto market, good news is rare for traders. However, one project stunned the market as the new year kicked in.
Paragon (PRG), the token issued by a blockchain firm aiming to reshape the cannabis industry, spiked above $10 in the last 24 hours from merely $0.1 – a rise of 9,650 percent.
However, this turned out to be a pump-and-dump scheme as the value of the coin tanked to $0.3 hours after reaching its peak.
Moreover, the sudden surge in trading happened in only one exchange – YouBit. Though the value of the coin surged in STEX – the exchange which handles more than 93 percent of PRG tradings – with the market flow, the spike was not as much as on YoBit.
While all of you losers where holding your precious Bitcoins, convinced that it’s a great technology and not a scam because it’s up 600% over the last few years, Paragon went up 6000% over four hours, proving that its technology is far superior and that it’s much less of a scam.
— Trolly McTrollface (@Tr0llyTr0llFace) January 1, 2019
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Cannabis and Blockchain
Paragon Chain is a California-based company developing blockchain-based solutions for the cannabis industry. It aims to improve the supply chain of cannabis by leveraging smart contracts, and blockchain-based database architecture. The company is even trying to get involved in the entire lifecycle of cannabis – from seed to sale.
The cannabis sector is still very controversial in the United States, even in the states that allow recreational use of the substance. To ease the operation of the companies dealing with cannabis, Paragon Chain also launched ParagonSpace – a coworking space aimed at cannabis firms in California.
Scuffle with the SEC
Paragon, however, because of its business model appeared on the Securities and Exchange Commission’s (SEC) radar.
After a long fight, the SEC declared the PRG tokens as securities accusing the firm of violating US securities laws by launching an initial coin offering (ICO). The market regulator, in last November, ordered the promoters of the project to refund the ICO investors participating before October 15, 2017. On top of that, the company was fined with $250,000.
Commenting after the SEC decision, Jessica VerSteeg, CEO of Paragon said: “Working shoulder to shoulder with an amazing team of lawyers from Schulte Roth & Zabel LLP, as well as an extremely knowledgeable team at the SEC, we have been able to reach this trailblazing deal that we expect will serve as the model for compliance for ICOs going forward.”
The PRG token also spiked abnormally twice in last December, the first one being a momentary rise of 1,122 percent.