ICO Issuer Settles SEC Registration Charges, Agrees to Return Funds and Register Tokens As Securities

The Securities and Exchange Commission today announced settled charges against blockchain technology startup Enigma MPC for conducting an unregistered offering of securities in the form of an initial coin offering (ICO). Enigma, based in San Francisco and Israel, has agreed to return funds to harmed investors via a claims process, register its tokens as securities, file periodic reports with the SEC, and pay a $500,000 penalty. According to the SEC’s order, Enigma raised approximately $45 million from sales of its digital assets (called ENG Tokens) in 2017. The SEC’s order finds that ENG Tokens are securities and that Enigma did not register its ICO as a securities offering pursuant to the federal securities laws and its ICO did not qualify for an exemption from the registration requirements.