The ICO project Enigma has settled with the US Securities and Exchange Commission (SEC) over charges of violating the securities law.
Enigma MPC is a blockchain startup that raised $45 million in a token sale from 2017. The SEC announced on Wednesday the settlement requires Enigma to refund all the investors it harmed by using a claims process, registering its tokens with the SEC as securities, filing reports to the agency and paying a $500,000 penalty fee. Back in 2017, Enigma sold ENG tokens that the SEC deemed as securities.
NEWS: Today Enigma MPC is announcing two significant developments: we have reached a settlement with the SEC regarding the 2017 issuance of ENG tokens, and the first Enigma mainnet has successfully launched! For more important details, read this post. https://t.co/Ru26ONDtkD
— Enigma – We Privacy (@EnigmaMPC) February 19, 2020
No Securities Registration Requirements Exemption
As the SEC says, Enigma wasn’t qualified to be exempted from the securities registration requirements. A blog post from the Enigma official website says the company is going to set up very soon the claims process, while the firm’s CEO Guy Zyskind explained how the settlement has been reached after many discussions conducted with the SEC. Here are his words on Enigma’s plans for the future:
“[It] clears the way for our development team to return its full attention and energy to our original and continued vision: building groundbreaking privacy solutions that improve the adoption and usability of decentralized technologies, for the benefit of all.”
Enigma Mainnet Was Just Launched
Zyskind also mentioned how the settlement allows the team working at Enigma to focus on the actual protocol, the company’s mainnet that launched last week included. Ever since it opened, the Enigma mainnet gained over 20 validators, says the company. It’s Cosmos SDK-based and secured by the new coin called Secret (SCRT). At the moment, Enigma is trying to legally swap its Ethereum-built ENG token for the new SCRT token. Here’s exactly what the blog post says about this:
“We are continuing discussions with our legal counsel and regulators to identify an effective means of facilitating a swap that complies with all relevant securities regulations, but for the time being, our team is not able to proceed. We appreciate your patience and will update you as things move forward.”