Enigma, a startup developing private smart contracts, settled charges with the Securities Exchange Commission for selling its ENG tokens as unregistered securities.
Enigma raised $45 million during its 2017 ICO. The startup did not register its ENG tokens as securities, nor did the ICO qualify for an exemption, said an official press release.
The San Francisco and Israel-based startup agreed to pay a $500,000 penalty, return funds to investors via a claims process, register its tokens as securities, and file periodic reports with the SEC.
“This settlement clears the way for our development team to focus fully on our original and continued vision: building groundbreaking privacy solutions that improve the adoption and usability of decentralized technologies, for the benefit of all,” said Enigma in a post.
John Dugan, Associate Director for Enforcement, said of the enforcement, “The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”