Block.One, the creator of the EOS.io blockchain, has settled with the Securities and Exchange Commission (SEC) for $24 million after the agency ruled the year-long EOS.io ICO, which raised $4.1 billion between June 2017 and June 2018, was an “unregistered initial coin offering”. Despite the large fine, many in the community have seen the result as a win for EOS.io, who are now free to carry on their activities having paid their dues, while the SEC gets a nice amount to add to its coffers.
SEC’s Straightforward Case
Unlike some more complicated cases, the SEC’s case against Block.One was straightforward:
Block.one 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.
This offence was enough to get Block.One a $24 million slap on the wrist without having to admit or deny the charge. This sum represents a mere 5.8% of the money raised through the ICO, a charge that one would have to assume Block.One were happy to pay in order to have the SEC off their backs for good, in the knowledge that they can now carry on with their record unblemished, a fact was not missed by crypto Twitter:
Visualization of the SEC’s $24mil $EOS fine vs. their original $4.1bil raise: pic.twitter.com/iGbdnnlxXv
— The Crypto Dog? (@TheCryptoDog) September 30, 2019
EOS settles with the SEC as an unregistered security
EOS UP 11%
Tell me again what’s you’re worried about?
Money makes the world go round
Money fixes all problems.— MRc (@MrCugs) October 1, 2019
A Good Deal All Round
The end result is satisfactory for all parties, with the SEC allowed to play the ‘protecting consumers’ card and Block.One allowed to carry on without forfeiting much capital. EOS.io is one of a number of ICOs the SEC has investigated this year, with the vast majority either ending in defeat or settlement for the defendants. Block.One is their highest profile case to date, and is currently the only member of the top 10 cryptocurrencies to have faced such charges. Given the fact that two of the top 10 spots are currently taken up by XRP and USDT however, things may not remain that way for long.
