The Securities and Exchange Commission (SEC) has agreed to a settlement offer brought forth by Nebulous Inc., the firm behind the digital currency Sia, after it was accused of selling an unregulated digital currencies.
According to the U.S. SEC, they filed cease-and-desist proceedings against Nebulous Inc, and was greeted with a settlement offer that was accepted by the regulatory body on the 30th September 2019.
SEC reflected that Nebulous did not deny any of the allegations against it from SEC. In 2014, Nebulous launched the token offering of Sianotes, which was in 2015 converted to Siafunds. As recorded in the filing by SEC, Nebulous sold an unregistered token to U.S. investors without seeking regulatory approval from the commission, an action violating the U.S Securities Act.
The SEC accused that Nebulous did not have a registration statement that it filled purposely for the offering and also did not qualify for a registration exemption. Forthe SEC discovery and allegation, Nebulous accepted to pay a penalty of $225,000, which will make SEC not to push further any enforcement action against Siacoin’s parent company.
The settlement will prevent SEC from hunting Nebulous or any of its activities based on the latest accusation. While it expunges Nebulous from registering with the SEC, it comes shortly after SEC sanctioned EOS $24 million for conducting an unregulated ICO.
The Siacoin team said it did not intentionally sell unregistered token in 2014 because they were not aware that the Sianotes or Siafunds could be deemed securities by the SEC. In fact, Siacoin’s offering took place earlier before that of Ethereum and before the commission issued guidelines on cryptocurrency-related projects.
As reflected in Nebulous defense statements, the team said they properly registered their 2018 offering of Siafunds upon noticing the existence of SEC’s 2017 guidance on cryptocurrency.
“We are disappointed that the SEC chose to take action with respect to our relatively small 2014 offering,” the team said.
Nebulous said it was charged twofold what it raised during its initial coin offering, as the firm sold approximately 1,250 SiaNotes in 2015 at $96 per note, amounting to $120,000 in total.
Pointing further, Siacoin team said the SEC did not tender any criminal charges against Sia core developers nor does it plan to hold Nebulous responsible for any noticed anomaly.