Restaurant-Review App Is the Latest Target in U.S. Crackdown on ICOsBy
Munchee halts $15 million offering in response to SEC scrutiny
Agency has said many ICOs should be registered as securities
The U.S. Securities and Exchange Commission issued its latest warning shot to the red-hot initial coin offering market by bringing an enforcement case against a San Francisco-based maker of a food-review app.
It also laid out that companies can avoid harsh sanctions if they cooperate with regulators.
Munchee Inc. halted its planned $15 million ICO after the SEC questioned whether the offering should have been registered as a security, the agency said in a Monday statement. While Munchee faced a cease-and-desist order, it wasn’t fined. The company didn’t admit or deny wrongdoing.
“In deciding not to impose a penalty, the commission recognized that the company stopped the ICO quickly, immediately returned the proceeds before issuing tokens, and cooperated with the investigation,” said Stephanie Avakian, co-director of the SEC’s Enforcement Division. “We will continue to scrutinize the market vigilantly for improper offerings that seek to sell securities to the general public without the required registration or exemption.”
Last week, the SEC won an emergency asset freeze to stop an ICO that promised investors a 13-fold profit in less than a month. The case against Dominic Lacroix and his company PlexCorps was the first brought by a new SEC unit formed in September to target misconduct involving distributed ledger technology.