The US Securities and Exchange Commission has fined Block.One developer $24 million for the illegal sale of securities. The document was released by the regulator early this week.
The developer of blockchain protocol EOSIO Block.One is said to launch ICO without corresponding registration and generated "equivalent of several billion dollars over approximately one year".
Notably, the token sale was held after SEC released The DAO Report of Investigation. For reference, the report states that digital tokens can bear some features of securities.
As a result, the company failed to register ICO as securities offering in line with the Federal Law on Securities as well as did not "seek an exemption from the registration requirements."
The representative of SEC cited that some US-based investors took part in the offering. Still, the companies that offer or sell securities in the USA must comply with the effective legal rules that cover all industries and investment products.
"Block.one did not provide ICO investors with the information they were entitled to as participants in a securities offering,” said Steven Peikin, Co-Director of the SEC’s Division of Enforcement.
The developer agreed to pay the fine but did not accept the charges. For reference, the subject ICO attracted $4.1 billion, while the penalty is just $24 million.