SEC Announces Regulatory Oversight of Cryptocurrency Companies

With the explosion of the initial coin offerings (ICO’s) market over the past couple of years, the Securities and Exchange Commission (SEC) is now paying closer attention to company activity. The Commission has issued $250,000 fines to both Paragon and Airfox for what the SEC considers unregistered offerings of tokens. In addition, under Section 12(g) of the Securities Exchange Act of 1934, the companies must register the tokens as securities and file periodic reports with the Commission. Registering with the Commission ensures investors are receiving documentation that helps them make an informed decision. The two companies have also agreed to compensate investors who purchased tokens during the unregistered offerings if they elect to make a claim.