Industries Technology pays $24 million federal penalty

  •  | 
Print this page By Richard Foster | .(JavaScript must be enabled to view this email address)

On Sept. 30, the Securities and Exchange Commission ordered blockchain technology company to pay a $24 million civil penalty for conducting an unregistered initial coin offering of digital tokens that raised $4 billion.

The SEC order found that violated the registration provisions of federal securities laws. consented to the order and did not admit or deny the SEC’s findings.

Co-founded by Virginia native and Virginia Tech graduate Daniel Larimer, announced plans in September to locate its $10 million U.S. headquarters in Arlington County, creating 170 jobs. Registered in the Cayman Islands with offices in Hong Kong, has an operation center in Blacksburg that employs more than 80 engineering and research and development workers. The company's Arlington headquarters project received a $600,000 grant from the state government's Commonwealth's Development Opportunity Fund. is also eliginle to receive a Major Business Facility Job Tax Credit for the jobs the project is expected to create over the next three years.’s $4 billion ICO of 900 million tokens was held between June 2017 and June 2018 and the company “did not register its ICO as a securities offering pursuant to the federal securities laws, nor did it qualify for or seek an exemption from the registration requirements,” according to an SEC release. The company stated that it intended to use the capital raised from the ICO for general expenses, as well as to develop software and promote blockchains based on the software.

“A number of U.S. investors participated in’s ICO,” said Stephanie Avakian, co-director of the SEC’s enforcement division. “Companies that offer or sell securities to U.S. investors must comply with the securities laws, irrespective of the industry they operate in or the labels they place on the investment products they offer.”

Steven Peikin, co-director of the SEC’s Division of Enforcement, said, “ did not provide ICO investors the information they were entitled to as participants in a securities offering.”

showhide shortcuts