The U.S. Securities and Exchange Commission (SEC) has agreed to settle charges with two startups that sold tokens through Initial Coin Offerings (ICOs) in 2017. The companies were charged by the SEC for running their ICOs after the regulator clearly defined such offerings as unlicensed securities in its DAO Report of Investigation. The startups indicted by the SEC are Boston-based Airfox, which sold $15 million worth of tokens, and Paragon Coin, which raised $12 million selling tokens. “We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, explained in a release. “These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”The two cases happen to be a first for the commission where civil penalties were imposed for "ICO securities offering registration violations," and they follow the commission's first non-fraud case against Munchee Inc. in 2017, when it stopped the startup's token offerings and instructed the company to return proceeds to investors.The companies involved have, however, agreed to settle the case without admitting to or denying the findings from the regulator. Each company will pay a $250...
