In an effort to provide a clean environment in the US crypto market, the Securities & Exchange Commission has initiated action against a website involved in listing tokenized forms of crypto over the doubts that the tokenized assets are in fact “securities”. SEC alleges that the website did not disseminate information whether it has been paid by the token issuer or not for promoting coin offerings.
On 14th July (Wednesday), 2021, the Securities & Exchange Commission of the US (SEC) has announced taking action against a website. It was informed by SEC that it has imposed charges against a website that was involved in the listing process of tokenized crypto. SEC alleged that the website was promoting “securities” by assuming that the coin offering was “crypto”. SEC indicated further that the charges against the website’s operator have been settled as the operator has agreed to pay the fine.
It was reported that the website against which SEC took action was “Coinschedule.com”. This website is a renowned website that usually promotes “securities” relating to digital assets, told SEC. According to SEC, Coinschedule.com is a website that is run and operated by a British company known as “Blotics Ltd.” SEC stated that it has been approximately 4 years (i.e. since 2016 till 2019) that the website was accessible to the US public. In this period, there was a huge number of visitors from the US visiting the website.
Reportedly, the website provided information relating to several initial coin offerings (ICOs). Apart from providing information, the website also provided the website links directing the visitors to the platforms of token issuers. However, the website always promoted only those token issuers which had a specific “trust score”. The website claimed that the score was based on international standards and therefore there was no element of fraud. But the view of SEC was to the contrary.
It was alleged by SEC that there was nothing wrong with the website promoting ICOs of different coin issuers. However, the problem was that the website failed to disseminate the information whether it was paid by the coin issuers or not. The provision of such information was mandatory on the part of Coinschedule.com, claimed SEC. Therefore, the actions of the website are not following the rules and regulations resulted in the imposition of charges. The website was found operating in violation of the US security laws especially anti-touting provisions described therein, said SEC. Whatever remuneration has been obtained by Coinschedule.com from the token issuers has to be completely disclosed under the law.
Later on, SEC also apprised that the website accepted the decision of the SEC without any objection. Coinschedule.com has agreed that it will immediately make sure that no further violation on the platform is committed. A fine to the tune of US$ 197,434 has been imposed under the heads of penalty, prejudgment interest, and disgorgement.