SEC and Enigma Settle Dispute Over $45 Million ICO

Cornelia Mascio
Febbraio 21, 2020

Enigma MPC is a blockchain startup that raised $45 million in a token sale from 2017.

The United States Securities and Exchange Commission (SEC) issued a press release announcing the agreement reached with Enigma. The company will now register its token as a security and file regular reports with the SEC, as other similar firms have to do. It also points out that investors who purchased ENG tokens will have the right to request a refund with interest, however, those that are happy with their investment can hold on to their tokens. The reimbursement will be made through a claim process.

"All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones", SEC Boston branch Associate Director for Enforcement John Dugan said in the statement. The SEC found that the startup violated SEC regulations by offering and selling ENG Tokens as investment contracts without either registering with the SEC or receiving an exemption from registration.

In general, this appears as though one of the ore positive instances of a SEC enforcement action against an ICO, since in this case the venture had the option to get to the goal of going live as opposed to being killed before the launch.

The San Francisco and Israel based startup, Enigma reportedly consented to the order without admitting or denying the findings. "We're thrilled to put the process in the rearview mirror and turn back to our development work with full attention".

The mainnet will be supported and operated by over 20 independent validators from the Enigma ecosystem and community.

The settlement also allows the Engima team to focus on its actual protocol, he said, including the launch of its mainnet last week. Enigma's mainnet is a proof-of-stake-based blockchain based on Cosmos SDK.

Enigma is now looking for "legally compliant avenues" for swapping its ENG token, which is built on ethereum, for its new SCRT token. This comes when Enigma just Launched its mainnet.

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