A Seattle-based e-sports platform, Unikrn, has agreed to pay the fine amounting to $6million to settle a complaint by the US Securities and Exchange Commission and said that it raised $31 million by selling unregistered securities, according to a press release.
Agreeing to a $6 million fine
Formerly, the firm has boasted celebrity investors like Mark Cuban and Ashton Kutcher and capitalized in 2017’s ICO boom by offering UnikrnGold tokens in June of that year. They managed to raise money to over $31 million in a short span.
Unikrn has positioned the tokens for an attractive proposition for investors and then stated that they would become more appreciated and more profitable – for early buyers as it has released crypto-based gambling platforms.
Nonetheless, things went downhill from there; the promises were meant the token offering was a red flag in the SEC’s books. Then, a complaint was filed against Unikrn, further alleges that it violated regulations that require companies to register the initial public offering with the federal government. A three-year court battle ensued afterward.
It came to an end when Unikrn has agreed to pay over $6 million to cover investor damages and other fines. Conversely, as reports say, the company notes that the SEC’s strategies for ICOs were available after it has started selling UnikoinGold.
They have added that in those guidelines, the SEC has rejected the industry’s position that cryptocurrencies were not safekeeping and pledged to control them.
SEC’s fines too high for Unikrn
Regardless of the judgment, industry observers say that the penalties imposed on Unikrn have been unusually high compared to what most other crypto firms have paid put relative to the amount they raised.
For instance, the blockchain-based dApp developer Block.one had settled an SEC investigation in 2019, they have paid $24 million, a small amount since it raised nearly $4 billion in the ICO.
A spokesperson from SEC did not immediately respond to why the Unikrn settlement was so high by comparison, the report states.
Hester Peirce, the SEC Commissioner and known as “Crypto Mom” for her progressive stance on regulations for the blockchain and cryptocurrency industry, has argued that the $6.1 million settlement can force Unikrn to go out of business.
Meanwhile, Unikrn CEO Rahul Sood elaborated that he had no plans to shut Unikrn down. The company will “move forward” and “continue growing our business,” he said.