SEC Commissioner Hester Peirce has expressed in writing her disagreement with the measures of the settlement between the SEC and Unikrn, which, in her view, involve the cessation of operations of Unikrn with the UKG token.
Through a settlement agreement between the United States Securities and Exchange Commission (SEC) and online gambling startup Unikrn, this company will have to pay a fine of USD 6.1 million and set the deactivation of its Unikoingold (UKG) token. Unikrn is now facing the accusation of conducting an initial coin offering (ICO) in 2017, all of this without the current consent from the SEC.
On Tuesday, September 15, the SEC published a press release on its website announcing the decision “Unregistered ICO Issuer agrees to deactivate token and pay distribution fine to injured investors.”
The SEC notes in the statement that Unikrn was accused of carrying out, between July and October 2017, an unregistered ICO with the Unikoin token offering, with which it raised USD 31 million. “The order found that Unikrn offered and sold UKG as investment contracts, which constitute securities, but did not record such an offer, nor did it qualify for an exception.”
The SEC also notes that the agreement with Unikrn allows “the return of all Unikrn assets to injured investors and includes measures to prevent future sales”, the deactivation of the tokens is one of the features.
Regulators demand regulatory decisions
Unikrn was accused of executing an ICO without registration from regulatory bodies. Source: Unikrn / FacebookA document with the position of Hester Peirce, a member of the commission, was also published on the SEC website on Tuesday, who has already shown favorable positions towards cryptocurrencies.
Peirce believes that, while many of the compliance actions that the SEC has taken in the past include allegations of fraud, Unikrn was only accused of carrying out an ICO without the corresponding registration with the regulators.
On the one hand, the Commissioner admits that violations of the proper registration of securities operations are serious and believe that there must be sanctions against it. On the other hand, the proportions of these sanctions are serious, exaggerated, and enormous.
Peirce highlights that in addition to the deactivation of the UKG token, which affects its current operation, the amount of the fine represents the complete assets of the company. “In other words, the Commission is effectively forcing the company to cease operations, for an alleged offer of supposed securities,” says Peirce.
Then, Peirce calls for a regulatory provision that combines the SEC’s interest in protecting investors with the willingness of developers to experiment. According to Peirce, such a provision could include three years for a company like Unikrn to develop and optimize its platform, under the supervision of the SEC.
The qualification of a token as security is key to applying existing legislation to token issuing companies. Peirce emphasizes in the document that he did not agree with his colleagues in qualifying UKG as security.
Both the position of the SEC is reflected, which has reiterated that bitcoin is not a security, as the position of Hester Peirce on the rating of tokens. The commissioner has stated that “not all cryptocurrencies other than bitcoin are securities.” Peirce argued that this is still a topic of discussion, as some of the crypto assets function like securities, others as currencies, and some as “other things”, so that the picture becomes varied and diffuse.
By: Jenson Nuñez.
