The regulator announced Wednesday that under the settlement Enigma will refund «harmed investors» using a claims process, register its tokens as securities with the SEC, file reports to the agency and pay a further $500,000 as a penalty. Enigma sold ENG tokens in 2017, which the SEC said are securities.
The U.S. Securities and Exchange Commission (SEC) has settled securities law violation charges with Enigma MPC, a blockchain startup that raised $45 million in a 2017 token sale.
Engima did not qualify for an exemption from securities registration requirements, according to the SEC.
According to a blog post, Engima will set up the claims process in the near future.
In a statement sent to CoinDesk, Enigma CEO Guy Zyskind said the settlement «is the culmination of an extended series of discussions with the SEC.»
«It clears the way for our development team to return its full attention and energy to our original and continued vision: building groundbreaking privacy solutions that improve the adoption and usability of decentralized technologies, for the benefit of all,» he said.
The settlement also allows the Engima team to focus on its actual protocol, he said, including the launch of its mainnet last week.
The Enigma mainnet, which launched on Feb. 13, now has more than 20 validators, the company claimed, with the mainnet based on Cosmos SDK and secured by a new coin dubbed «secret,» according to its blog post.
Enigma is now looking for «legally compliant avenues» for swapping its ENG token, which is built on ethereum, for its new SCRT token.
«We are continuing discussions with our legal counsel and regulators to identify an effective means of facilitating a swap that complies with all relevant securities regulations. But for the time being, our team is not able to proceed. We appreciate your patience and will update you as things move forward,» the blog post said.
IKEA in ‘World First’ Transaction Using Smart Contracts and Licensed E-Money
IKEA Iceland has taken part in a commercial transaction on ethereum, using smart contracts and licensed e-money to facilitate the settlement of an order from local retailer Nordic Store.
The transaction was carried out on a platform provided by supply chain management firm Tradeshift and used “programmable digital cash” from ConsenSys-backed Monerium, according to an announcement from Tradeshift on Tuesday. Specifically, Nordic Store bought goods from IKEA and settled an e-invoice using Monerium’s tokenised Icelandic krona.
Monerium and Tradeshift suggested the “world’s first” transaction shows that “government-regulated, programmable e-money is ready for mainstream markets.”
As reported in June, Reykjavik-based Monerium was licensed by the Financial Supervisory Authority of Iceland (FME) as its first Electronic Money Institution, making the startup the first to have regulatory approval to provide fiat payment services over blockchain systems across the European Economic Area.
The Electronic Money Institution rules were set up originally for prepaid debit cards by the European Union after the 2008 financial crisis.
“With a ‘smart invoice’ we can issue tokens that represent the future cash flow down to each dollar on the invoice. Whoever holds tokens will get paid upon due date, which makes smart invoices ideal to use for financial-services apps”, said Gert Sylvest, co-founder of Tradeshift.
Tradeshift – which also created the “smart invoice” for the transaction – was notably backed by Goldman Sachs in a $250 million Series E funding round last May. The round valued the firm at at $1.1 billion and marked a deeper move into the blockchain industry by the firm.
Stefan Arnason, CFO of IKEA Iceland, said:
“A programmable financial supply chain, where trading partners can connect information flows to money flows through smart contracts, will transform how suppliers and customers interact.”
