A data encryption startup settled SEC charges for registration failures involving the offering and selling of digital tokens.
According to the SEC, the startup raised $45 million in the sale of 75 million ENG Tokens. The SEC reported that the startup told investors that the funds were used to (i) create a digital asset trade-testing platform (a/k/a the "Catalyst Application") and (ii) build a data marketplace intended for data on cryptocurrency and, eventually, other forms of data. 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.
To settle the charges, the startup agreed to (i) cease and desist from further violating SEC regulations and (ii) pay a civil monetary penalty of $500,000.
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