The U.S. Securities and Exchange Commission said Tuesday that it has settled charges with Unikrn Inc. for conducting an unregistered initial coin offering (ICO).
As a result of the settlement, Unikrn will pay a $6.1 million penalty, which will be distributed to investors, without admitting or denying the regulator's findings. According to a court order, Unikrn will "permanently disable UKG within 10 days of the date of this Order."
Per the SEC's statement:
"Unikrn promised investors that it would facilitate a secondary trading market for the tokens and that its efforts to increase the usages for the UKG token would increase demand for and in turn, the value of, the tokens. The order finds that Unikrn offered and sold UKG as investment contracts, which constituted securities, yet failed to register the offering or qualify for an exemption."
Unikrn raised about $31 million in a 2017 ICO. It notably drew the backing of investor Mark Cuban, with the goal of creating a betting platform that could be used to place bets on popular online games. The firm had previously been accused of violating U.S. securities laws in a civil lawsuit.
"The securities registration and exemption framework is designed to ensure investor protection and access to material information, while also facilitating capital formation. Failure to follow this framework harms investors and our markets," Kristina Littman, head of the SEC Enforcement Division's Cyber Unit, said in a statement.