EOS creator Block.One pays $24 million fine over unregistered ICO

Block.One, the creator of the EOS network, has agreed a civil settlement with the Securities and Exchange Commission (SEC) over an unregistered ICO that took place in 2017 and 2018.

The company has agreed to make a one-off payment of $24 million whilst neither admitting or denying the SEC’s findings, according to an official statement.

The SEC has responded by issuing Block.One with a waiver that stipulates it will not be subject to ongoing restrictions that usually apply with settlements of this type.

The ICO in question saw tokens being sold as ERC-20 tokens on the Ethereum blockchain, although Block.One states that the tokens are no longer traded or in circulation.

EOS raised around $4 billion during its ICO, making the $24 million payment to the SEC less gruelling than first thought.

The case will be significant for upcoming ICOs looking to raise capital as the eventual fine by the SEC is far less than the amount of capital raised, making running an ICO more appealing.

Conversely, Blockstack recently became the first blockchain company to file with the SEC under Regulation A+. The company raised $23 million, although the cost of going through the SEC equates to around $2 million – or 10% of the capital raised.

This demonstrates, wrongly or rightly, that it may be more financially astute to launch an unregistered ICO and simply pay the fine afterwards, although the SEC still has the capability to clamp down on unregistered ICOs, especially if they are considered to be a security.

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