The SEC sues Paragon Coin alleging that Paragon conducted an unregistered ICO, raising approximately $12 million from investors. The SEC argued that the sale of PRG tokens constituted an unregistered securities offering, thereby violating Sections 5(a) and 5(c) of the Securities Act. Paragon settled with the SEC by agreeing to pay a $250,000 penalty, offering a rescission to their investors and agreeing to register its token as securities.
This case was part of the SEC’s first enforcement actions against ICOs that had not registered their token sales as securities offerings. This action solidified the SEC’s position that many ICOs, even those claiming to offer “utility tokens,” could be considered securities and thus require registration. The registration of the PRG token as a securities set a precedent for future ICOs.
File No. 3-18897
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