American Security and Exchange Commission (SEC) has sanctioned a crypto gaming firm Unikrn with a fine of about $6 million.
The sanction according to the regulator is for conducting an ‘unregistered’ initial coin offering ( ICO) in 2017, which is a violation of the U.S registration laws.
SEC alleged Unikrn made $31 million through sales of its UnikoinGold (UKG) token. The gaming firm was to use the money it made from the ICO to improve its gaming platform and develop additional applications for the UKG tokens.
However, SEC in its sanction ordered Unikrn to prevent future sales of its token to retail investors by delisting the UKG token on all exchanges it trades.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit said that the regulators are going to share all Unikrn’s assets to investors that were promised returns by the firm.
SEC Commissioner kicks against sanction on crypto gaming firm
Contrary to these claims, SEC Commissioner, Hester Pierce, has dissented the regulator’s sanction on the crypto firm.
In a statement released by crypto mom as she is fondly called, she noted that the gaming company was not accused by investors of fraudulent behavior.
“Unikrn is alleged to have offered and sold its tokens in an unregistered offering and in a manner that did not qualify for an exemption; it is not alleged to have engaged in any fraud in doing so, the statement read.”
The sanction against the crypto gaming firm is the latest in a growing line of enforcement actions arising from initial coin offerings, she claims.
Hester Pierce said that Registration violation slammed against the crypto firm are serious, and SEC’s enforcement actions can serve to deter such violations and protect harmed investors.
She urged the regulators to strive to avoid enforcement actions and sanctions as these acts could weaken innovation and stifle the economic growth that innovation brings.
SEC clampdown on ICO’s, Pierce 3 years safer harbor
SEC over time is known to clampdown on Initial Coin Offering or token launch.
The regulator sight several law infringements like unregistered token sales, fraud, market manipulation, to nail firms set to raise capital or launch their digital assets.
Months back, SEC frustrated messaging app giants, Telegram in its attempt to launch its Gram token. Telegram Group and SEC were enmeshed in a dirty legal battle of its ICO launch last year.
Eventually, Telegram gave up in the fight announcing the end of its Telegram Open Network and Gram following a regulatory battle with SEC. The messaging giants refunded investors’ stake.
Similarly, film producer Ryan Felton, rapper and actor Clifford Harris, Jr., known as T.I. and three others were in trouble with SEC for promoting Felton crypto project.
SEC’s alleged that Felton promised to build a digital streaming platform for FLiK, and a digital asset trading platform for CoinSpark. Instead, Felton allegedly misappropriated the funds raised in the ICOs.
The list of ICO project the regulator has acted against continues to grow prompting Hester Pierce to intervene in Unikrn’s sanction.
She resolved to a regulatory safe harbor that could resolve SEC’s dispute and growing crypto firms and other ICO projects.
“As I proposed earlier this year, a well-designed, narrowly tailored regulatory safe harbor would efficiently and effectively combine the Commission’s interest in protecting investors with developers’ ambition to experiment. Affording a company like Unikrn a three-year regulatory window within which to further develop and refine its platform—while still subjecting it to the antifraud laws—would provide benefits to token purchasers, token issuers, and the Commission, she said.