Russian firm ICORating settles $270K fine with SEC for concealing ICO touting payments
Thu, 22 Aug 2019, 07:33 am UTC
The U.S. Securities and Exchange Commission (SEC) has charged Russian-based analytical agency ICORating for failing to disclose payments for positive reviews of various cryptocurrency events.
As per a press release, the SEC fined ICORating $268,998 for projects rated between December 2017 and July 2018. According to the commission, the projects rated by ICORating during that time have raised funds via initial coin offerings (ICOs), which is classified as securities by the SEC. For this reason, proper disclosure should have been made to potential investors, violating the anti-touting provisions of Section 17(b) of the Securities Act of 1933.
“The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item. This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain,” Melissa Hodgman, Associate Director of the SEC’s Enforcement Division, said.
Founded in September 2016, ICORating provides a rating platform for companies that were conducting ICOs. Currently, the website lists more than 5,000 ICOs, indicating their risk level so investors can make informed decisions. It also lists several team members from prominent crypto projects such as NEO. But by far, the SEC did not charge any company members.
The St. Petersburg-based company has agreed to pay $106,998 in interest and a civil penalty of $162,000 without admitting or denying the SEC findings.
Meanwhile, crypto exchange startup INX Limited is reportedly planning to score $129.5 million through an initial public offering (IPO). This will mark the first security token sale registered with the SEC and one of the very few full-fledged IPOs in the blockchain industry.
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