EOS Parent Company Block.One Settles Securities Issue With the SEC By Paying $24 Million In Penalties

EOS’ parent company Block.One and the U.S. Securities and Exchange Commission (SEC) have ultimately reached a settlement. Block.One has agreed to pay the SEC $24 in penalties for conducting an unregistered Initial Coin Offering (ICO) for EOS.

Earlier this week on Monday, September 30, the SEC announced that it has settled all charges against the EOS-maker in form of a civil monetary penalty. In the press release, the SEC said that Block.One’s ICO for 900 million EOS tokens “began shortly before the SEC released the DAO Report of Investigation and continued for nearly a year after the report’s publication.”

The SEC said that the EOS ICO was worth billions of dollars and its parent company had failed to register its offering with the U.S. securities laws.

Co-director of the SEC’s Division of Enforcement Stephanie Avakian said: “A number of U.S. investors participated in Block.one’s ICO. Companies that offer or sell securities to U.S. 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.”

Besides, Steven Peikin, co-director of the SEC’s Division of Enforcement has also alleged that Block.One kept its investors uninformed regarding this matter. “The SEC remains committed to bringing enforcement cases when investors are deprived of material information they need to make informed investment decisions,” he said.

While clarifying the matter further, Block.One said that the settlement currently applies only to the sale of the original ERC-20 tokens it had sold. Later when the EOS network went live, EOS swapped the ERC-20 tokens to its existing EOS token.

Since the ERC-20 tokens are no longer in circulation, the EOS tokens don’t to be “registered as a security with the SEC,” says Block.One in its press release. The EOS-maker further adds:

“The SEC has simultaneously granted Block.one an important waiver so that Block.one will not be subject to certain ongoing restrictions that would usually apply with settlements of this type. Block.one believes the SEC’s granting of this waiver evidences Block.one’s continuing commitment to compliance and best practices in the United States and globally.”

“We are excited to resolve these discussions with the SEC and are committed to ongoing collaboration with regulators and policy makers as the world continues to develop more clarity around compliance frameworks for digital assets.