EOS Price Reacts Positively to SEC’s Charge on Parent Company – Is the Worst Over?

EOS Price Reacts Positively to SEC’s Charge on Parent Company – Is the Worst Over?

The SEC has charged Block.one, the developer of EOS cryptocurrency for sale of unregistered securities. According to SEC’s press release, the company has been charged for the sale of over 900 million EOS tokens over a year.

Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement told the press,

“Companies that offer or sell securities to US investors must comply with the securities laws, irrespective of the industry they operate in or the labels they place on the investment products they offer.”

How was EOS unaffected?

Block.one also published a press release on their website regarding the issue. The firm noted that SEC charged them for the sale of ERC-20 tokens which must have been registered as securities. However, the EOC-20 tokens were burnt, and EOS tokens shifted to EOSIO blockchain platform.

 

The operations of the native platform, hence, remains unaffected. Block.one also noted that the SEC has also granted them a waiver. It protects them from “certain ongoing restrictions that would usually apply with settlements of this type.”

A Small Fine

The SEC levied a fine of $24 million which Block.one accepted without admitting or denying the agency’s findings. The amount of the penalty was rather small compared to the amount raised by the firm. According to sources, they raised about $4 billion during the sale from June 2017 – June 2018.

Steven Peikin, Co-Director of the SEC’s Division of Enforcement noted that,

“Block.one did not provide ICO investors the information they were entitled to as participants in a securities offering,”

 

 

The price reaction to the news has been positive on EOS. The investors in the blockchain platform have been apprehensive of the SEC for a long time. The firm has been let off with a small fine and no regulations on the current status of the cryptocurrency has been passed. The community sees this as a win-win.

eosusd
EOS/USD 4-Hour Chart on Bitfinex (TradingView)

The price of EOS at 3: 15 hours UTC on 1st October 2019 is $3.09. It is trading 10.86% higher on a daily scale. The crypto market is on the rise and unaffected by the ruling.

Various other firms can expect similar fines for the sale of their ICOs. It might include popular projects like Tezos, Maker, Binance Coin, Ripple, Tron, and so on. However, the SEC is examing each firm individually. Hence, the amount might differ for specific companies and projects.

Do you think that ruling will foster the growth of cryptocurrencies? Please share your views with us. 

Summary
EOS Price Reacts Positively to SEC's Charge on Parent Company - Is the Worst Over?
Article Name
EOS Price Reacts Positively to SEC's Charge on Parent Company - Is the Worst Over?
Description
Block.one, the developer of EOS cryptocurrency has been charged by the SEC for sale of unregistered securities. According to SEC's press release, the company has been charged for sale of 900 million EOS tokens over a span of a year.
Author
Publisher Name
CoinGape
Publisher Logo
Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Author: Nivesh Rustgi

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

Post your comment...
Nivesh Rustgi 677 Articles

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

Follow Nivesh @