SimplyVital Health, a company that held an Initial Coin Offering (ICO) in 2017 and was able to get $6.3 million USD worth of Ethereum (ETH), was recently charged by the U. S. Securities and Exchange Commission (SEC).
During the sale, the company was able to raise the money by selling Health Nexus (HLTH) tokens. These tokens were offered via a “simple agreement for future tokens”, also known as SAFT. The idea was to use this model in order to reduce risks associated with regulators intervening in the sale.
The problem was that the SEC determined that the company, which never actually delivered the tokens, was breaking the Securities Act by not being registered. This prompted the SEC to issuing a cease and desist order.
Since then, the health company has decided to refund most of the investors related to the sale. Because of this and the fact that the company decided to accept the cease and desist order, the SEC decided not to impose any other kind of penalties to the case.
Going after SAFT sales is a trend that the SEC has started to follow since last year. According to the institution, this new approach will make the operations smoother.
The entity will start to consider that some tokens can be utilities and securities at the same time, too. In this case, it is clear that because a token is used as a utility tool this does not mean that it is impossible to consider it a security.