andBinance.comandBinance.USMultiple unregistered offerings and sales of encrypted asset securities and other investment schemes. Defendants allegedly made billions of dollars in profits in this way, while placing investors assets at significant risk.
Amount fined: $20 million
Bloom Protocol — $30.9 million
Reason for prosecution: SEC accused it of conducting IC0 of unregistered securities Token
Amount fined: $30.9 million
On August 10, 2022, the SEC has ordered the encryption start-up company Bloom Protocol to register Token, otherwise it will face a fine of 31 million US dollars. At present, the US Securities and Exchange Commission has issued a cease and desist order against Bloom Protocol, accusing it of conducting unregistered crypto asset securities ICOs. Bloom promised to register Token and compensate investors who were harmed, or pay a fine of up to $30.9 million.
Kraken — $30 million
Reason for prosecution: Suspected offering of unregistered securities to U.S. investors.
Amount fined: $30 million
On February 9, 2023, crypto trading platform Kraken is under investigation by the SEC to determine whether it violated certain regulations for offering unregistered securities to U.S. investors. The current investigation is at an advanced stage, and it is unclear which tokens or products are being scrutinized.
On February 10, Kraken reached a settlement with the SEC and paid it a fine of $30 million. At the same time, Kraken will immediately terminate the encryption pledge service for US customers.
Block.One (EOS) — $24 million
Reason for suit: Allegation that unregistered initial coin offerings raised billions of dollars over nearly a year
Settlement amount: $24 million
In September 2019, the SEC filed a complaint against Block.One, alleging that Block.One provided investors with false and misleading information about EOS, an unregistered security offered by Block.one. In this lawsuit storm, the condition of the settlement given by the SEC is that Block.one needs to pay a fine of 24 million US dollars. In response, Block.one readily agreed that the penalty was a piece of cake for Block.one — only six-thousandths of its total financing of $4 billion.
EOS is the largest financing in the history of the currency circle, and its punishment results have had an important impact on the way Crypto practitioners view supervision. At that time, the community had a similar joke saying, 4 billion is only fined 24 million. This is not a punishment. This is encouragement.
After the settlement announcement, EOS jumped 10%.
Tezos — $25 million
Reason for prosecution: The founder and the foundation had conflicts, which delayed the launch of the Tezos mainnet, and investors were unable to receive XTZ for a long time
Amount fined: $25 million
In July 2017, Tezos launched an ICO to raise $232 million in funds, but when the foundation made a lot of money, Tezos co-founders Arthur and Kathleen accused Tezos in October 2017 Johann Gevers, chairman of the foundation, issued XTZ worth $1.5 million without authorization, and at the same time initiated a lawsuit against his company, Dynamic Ledger Solutions, demanding that the latter pay $25 million in settlement compensation.
The internal strife between the founder and the foundation directly led to the delay of the Tezos mainnet launch. The law firm Block Leviton began to investigate Tezos since October 2017, and in mid-December represented nearly 30,000 investors. Initiate a class action lawsuit.
In the end, the Tezos class action case lasted for nearly 3 years. The Tezos Foundation announced in March 2020 that it would seek a settlement and pay a $25 million fine to the SEC.
LBRY - $20 million
Reason for prosecution: LBRY violated securities laws by selling its native LBC Token without registering with the SEC.
Amount fined: $20 million
Amount fined: $1 million
Nvidia — $5.5 million
Reason for prosecution: Failure to disclose the impact of encryption mining on the company’s business
Amount fined: $5.5 million
On May 6, 2022, the SEC disclosed settlement charges against technology company NVIDIA Corporation (NASDAQ: NVDA ) for failing to adequately disclose the impact of cryptocurrency mining on the companys gaming business. It is understood that NVIDIA has declined to respond to the SECs findings, but agreed to pay a $5.5 million fine.
Kik Interactive (Kin) — $5 million
Cause of Action: Sale of digital asset securities to U.S. investors without registering the offer and sale as required by U.S. securities laws
Amount fined: $5 million
On October 21, 2020, the U.S. Securities and Exchange Commission (SEC) announced that the Federal District Court had reached its final judgment on the Canadian communications platform Kik Interactive Inc., ruling that Kik’s $100 million ICO in 2017 violated federal securities laws.
On June 4, 2019, the SEC filed a lawsuit in the U.S. District Court for the Southern District of New York alleging that Kik sold digital asset securities to U.S. investors without registering the offer and sale as required by U.S. securities laws. The court granted the SECs motion for summary judgment on September 30, 2020, ruling that Kiks Kin Token sale was a sale of an investment contract and was a sale of securities, and therefore Kik violated the federal securities laws when conducting the transaction. Kik also has to pay a $5 million fine.
Friedman LLP (Tethers former auditor) - $1 million
Reason for suit: Sequential violations of federal securities laws and substantial improper professional conduct
Amount fined: $1 million
On May 12, 2020, founder Pavel Durov (Pavel Durov) announced in the Telegram public channel that the Telegram Open Network project (Telegram Open Network, TON for short) was terminated. Telegram will return US$1.224 billion (or 70%) of the US$1.7 billion it raised to investors, and must pay a civil penalty of US$18.5 million to the SEC. If the company wants to try to sell Token again, it must notify 45 days in advance SEC.
EtherDelta — $388,000
Reason for prosecution: operating an unregistered digital currency trading platform
Amount fined: $388,000
The U.S. Securities and Exchange Commission (SEC) has sued Zachary Coburn, founder of digital currency trading platform EtherDelta, for operating an unregistered digital currency trading platform. Stephanie Avakian, co-director of the SECs enforcement department, pointed out that the digital currency trading platform EtherDelta should be registered with the SEC or have an exemption from registration as required.
On November 8, 2018, the SEC announced that Zachary Coburn had agreed to pay $300,000 in compensation, $13,000 in pretrial interest and a $75,000 fine to the Securities and Exchange Commission (SEC).
Telegram (TON) — $18.5 million, 1.224 billion returned
On December 3, 2017, TON released a 132-page white paper. In order to raise funds, on January 12, 2018, TON officially released the news of the ICO. TON originally planned to divide the closed-end financing into three stages. Unexpectedly, just after the second stage, it raised 1.7 billion US dollars in funds, which was twice the expected amount, so the third stage was cancelled.
On October 12, 2019, just before the TON mainnet was about to go live, the US Securities and Exchange Commission (SEC) suddenly sent a lawsuit letter. The SEC stated in the lawsuit letter that they characterized the financing process of GRAM as an online illegal digital asset securities sale and were preparing to file emergency action and obtain a temporary restraining order against the two offshore entity investment companies participating in the Token GRAM private placement , on the grounds that it violated the securities laws.
In court, in order to limit the sale of GRAM, the US courts made incomprehensible demands. The court required that Telegram not only cannot sell GRAM in the United States, but even globally. In desperation, Telegram could only announce the abandonment of TON.
On May 12, 2020, founder Pavel Durov (Pavel Durov) announced in the Telegram public channel that the Telegram Open Network project (Telegram Open Network, TON for short) was terminated. Telegram will return US$1.224 billion (or 70%) of the US$1.7 billion it raised to investors, and must pay a civil penalty of US$18.5 million to the SEC. If the company wants to try to sell Token again, it must notify 45 days in advance SEC.
