The co-founders of Thor Technologies and the company have been accused of making an unregistered securities offering by the U.S. Securities and Exchange Commission (SEC). To earn money for its “gig economy platform,” whose development had not even begun at the time, the business created and sold tokens in 2018.
Management Of Thor Technologies Is Accused Of Conducting An Unregistered ICO By A U.S. Securities Regulator
The United States Securities and Exchange Commission has accused Thor Technologies, its co-founder and CEO David Chin, and its co-founder and former CTO Matthew Moravec of conducting an unregistered issuance of securities through an ICO (ICO).
According to the SEC’s lawsuit, Chin and his business are accused of selling “Thor tokens” to the general public to raise money for the venture that aimed to develop a software platform for “gig economy” workers and businesses.
According to the regulator, digital assets were promoted as investment opportunities. The sale was advertised with the hope that their value would rise and with the promise that they would be listed on cryptocurrency trading platforms.
According to the SEC, the Thor platform still needed to be developed at the time of the offering, and tokens could not be utilized elsewhere. The transaction, which brought in $2.6 million in fiat and cryptocurrency from investors, was also not registered with the SEC and needed to meet the requirements for an exemption.
The U.S. District Court for the Northern District of California has received the complaint against Thor and Chin. The Commission requests civil penalties, prejudgment interest added to the restitution of allegedly illegally obtained gains, and injunctive remedies.
According to a second complaint, Matthew Moravec also participated in the unregistered token offer and sale. Matthew has consented to a settlement with the SEC and to the entry of a judgment requiring him to pay a civil penalty of $95,000 and disgorge $407,103 plus $72,209.45 in prejudgment interest. Moravec will also be prohibited from participating in crypto asset offerings for three years.
The announcement comes after SEC Chairman Gary Gensler stressed earlier this month how crucial it is to bring issuers of cryptocurrency security tokens into compliance. While underlining the dangers of what he sees as a “primarily non-compliant industry,” Gensler stressed that “nothing about the crypto markets is incompatible with the securities rules.”
ICO Industry Pays For Past Sins, Thor Token In Crosshairs
With the increased demand for cryptocurrencies in 2017 and 2018, the ICO market saw a significant boom. However, as the crypto winter hit, there was no longer any interest in funding projects by creating new digital coins.
SEC warned about the dangers of ICOs during the ICO craze, claiming that many offerings resembled securities and required the proper authorizations. Furthermore, some of them showed signs of possible fraud. Despite the passage of time, dishonest ICO proponents continue to pay for their transgressions.
Closing Thoughts
The founder of Titanium Blockchain Infrastructure Services, which committed a $21 million ICO fraud, pleaded guilty to his crime in July, according to a statement from the U.S. Department of Justice. For his crimes, including scamming investors, he could receive a sentence of up to 20 years in prison.
The proprietor of Crowd Machine and Metavine was found guilty by the SEC earlier this year of defrauding $40,7 million through an initial coin offering. The agency claims that he provided erroneous and fraudulent information for an unregistered offering.
