The US SEC has officially, and publicly, accused the Enigma MPC ICO of being a disguised Security Token Offering (STO).
The US federal financial market watchdog, the Securities and Exchange Commission, has announced that it has filed charges against this token sale by concluding it to be an unregistered Security Token Offering (STO) disguised as an Initial Coin Offering (ICO).
Enigma raised approximately $45 million from the sale of its ENG tokens in 2017, but only recently the SEC learned that these tokens are in fact security tokens and that the company should have registered them as such in accordance with federal laws, given that it could not benefit from an exemption from the registration requirement.
The SEC itself also points out that Enigma, based in San Francisco and Israel, has agreed to return the funds raised to investors, register its tokens as security, and pay a $500,000 penalty.
In addition, the order issued by the agency requires the company to cease and desist from further violations of the provisions of Federal Securities Laws.
Enforcement Associate Director of the Boston SEC regional office, John T. Dugan, said:
“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones. The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions”.
Enigma is a decentralized open-source protocol that allows anyone to perform calculations on encrypted data, enabling a higher level of privacy for smart contracts and public blockchains, with the goal of fostering the adoption and usability of decentralized technologies.
The ENG token debuted on the market at a price of $0.77, only to reach an all-time high a few months later, on January 11th, 2018, when it surpassed $8 during the speculative bubble.
Since then it has lost much value, hitting a low of $0.21 in December of the same year.
It is now worth $0.34, a loss of 25% compared to yesterday, most likely due to the news of the accusations made by the SEC.