After just a few days from the lawsuit against Ripple, SEC is on its way to sue another crypto founder for full refunds plus interest to its investors. Any company defaulting will face a thorough examination of the US securities regulatory body.
The Security and Exchange Commission does not show any signs of slowing down, with its recent accusation against Tierion. The body accused Tierion of violating securities law when it sold its TNT tokens. A few days ago, SEC charged with violating investors’ rights by not registering its offering, so this new suit is not surprising.
SEC demands refunds for ICO investors
At first, the regulatory body stopped the crypto company from operating. After which, the body asked the crypto founders to refund their investments in the company. The firm had successful crowdfunding and raised $25 million three years ago when it had its initial coin offering.
During its sales, it sold over $300 million tokens to accumulate the total price. Not only that, the company was equally fined a quarter of a million and given a cease order to prevent further sales of its token.
SEC asserts that Tierion should register TNT tokens under the securities section since they were investments. The crypto founders failed to get the approval of the SEC before launching the tokens out for sales. The regulatory body said the startup had been in the business as a SaaS company five years ago.
SEC continued by alleging that the startup was still in its development during the token sales and that investors should understand that their money from token sales funded the network. This allegation is similar to Ripple’s, being inline with the same defaulting to register as security.
Tierion investors can ask for refunds
SEC informed present TNT token investors to go to the company within the next two months to receive their full refunds with interest attached. The refund will be the exact amount they bought their tokens and at 0.1 cent interest.
This development is excellent news to previous buyers of the token who felt cheated by its failure to register its tokens as securities. The securities regulatory body has rules that violate investor rights when companies are not obliged to follow laid down procedures for investments.
Tierion took a quiet settlement and agreed to refund the investor’s money with interest. Despite the agreement to repay, the firm did not publicly reveal whether the accusations were true or not. Wayne Vaughan, the CEO of Tierion, told that current projects involving will continue even with the suit still in place.
The CEO explained that the order does not change anything about the firm but has allowed it to create better products. SEC accused numerous initial coin offering founders of possibly fraudulent activities, mainly to get fundings without meeting their promises, especially when they are not registered as securities. Investors can have a safer atmosphere even when they invest in digital assets with the agency’s good watch.