Blockchain technology startup Enigma MPC settles SEC charges

Maria Nikolova

The regulator has charged Enigma MPC with conducting an unregistered offering of securities in the form of an initial coin offering.

The United States Securities and Exchange Commission (SEC) today announced settling of charges against blockchain technology startup Enigma MPC for conducting an unregistered initial coin offering (ICO).

Enigma MPC, based in San Francisco and Israel, raised approximately $45 million by selling 75 million digital tokens (“ENG Tokens”) in an ICO in the summer and fall of 2017. Enigma and its promoters told investors that Enigma would use the funds raised in the ICO to develop a digital asset trade-testing platform (the “Catalyst Application”) and to build a data marketplace for cryptocurrency-related data. Ultimately, as Enigma told investors, Enigma also planned to use ICO funds to develop a marketplace for other forms of data as well (the “Enigma DataMarketplace” or “DataMarketplace”).

Enigma paid promoters and others to tout Enigma as a good investment opportunity. Among other things, Enigma engaged in a so-called “bounty campaign,” offering ENG Tokens to third parties in exchange for promotion of the Enigma ICO and Catalyst through social media, blogging, or for translating Enigma promotional materials into other languages. Enigma also sought to generate more interest in its ENG Tokens by working to have the token traded on secondary market digital asset trading platforms. Enigma also told prospective ENG Token investors that it was engaged in such efforts.

The SEC’s order states that ENG Tokens are securities and that Enigma did not register its ICO as a securities offering pursuant to the federal securities laws and its ICO did not qualify for an exemption from the registration requirements.

The SEC’s order requires Enigma to cease and desist from committing or causing any violations of the registration provisions of the federal securities laws. Enigma agreed to a claims process that would result in a return of funds to investors who purchased tokens in the ICO. The company also will register its ENG Tokens as securities and file periodic reports with the SEC. Enigma has also agreed to a $500,000 penalty.

Enigma consented to the order without admitting or denying its findings.

Read this next

Opinion

The FX Algo Wheel, is it wheels up and ready to take flight?

by David Catterick, Sales Director, BidFX Australia

Retail FX

eToro users now can trade underlying Italian stocks

Israeli social trading and multi-asset brokerage company eToro has expanded its service offering and trading products by incorporating new markets, namely Italian stocks listed at underlying exchanges.

Digital Assets

BlackRock bets on crypto bank Silvergate despite drastic fall

BlackRock, the world’s largest asset manager, has increased its stake in Silvergate Bank, a crypto-friendly lender that counts major crypto exchanges like Coinbase and Kraken as clients.

Opinion

A viewpoint from Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, on SEC regulation of the digital asset sector

The SEC’s latest episode comes across as more of a PR performance rather than an act of investor protection.

Digital Assets

Tether denies receiving any loans from Celsius, the opposite is true

World’s largest stablecoin issuer, Tether dismissed reports suggesting that it received a $2 billion loan from the bankrupt cryptocurrency lender Celsius.

Institutional FX

Cboe FX volume makes strong rebound in January

Cboe’s institutional spot FX platform today announced its trading volume for the month ending January 2023, which marks a mild rebound after a steep fall in December.

Uncategorized

XS.com appoints Exness alumni Mohamad Ibrahim as CEO

XS.com, the multi-regulated financial services provider, has appointed Mohamad Ibrahim as the group’s newest chief executive officer (CEO).

Technology

B2Broker Integrates Match-Trader Solution to Expands Its White Label Liquidity Offering

A global provider of technology and liquidity for the FX and cryptocurrency markets, B2Broker recently announced the extension of its white label liquidity offering by merging with Match-Trader.

Digital Assets

UK launches open consultation to regulate crypto exchanges, custody, and lending

The government’s proposed measures have been informed by recent market events – including the failure of FTX – which reinforce the case for effective regulation and sector engagement.

<