ICO issuer Unikrn to pay $6.1 million to settle charges with SEC

The Securities and Exchange Commission announced charges against Seattle-based operator of an online eSports gaming and gambling platform Unikrn Inc. for conducting an ICO of digital asset securities. The company has agreed to settle the charges with $6.1 million penalty, substantially all of the company’s assets, to be distributed to investors through a Fair Fund.

SEC’s order claims that from June to October 2017, Unikrn raised around $31 million through its offering of the UnikoinGold (UKG) token. The SEC found that Unikrn intended to use the proceeds to make more features for the gaming platform and to develop additional applications for the UKG tokens. The company promised investors that it would facilitate a secondary trading market for the tokens and that its efforts to boost the usages for the UKG token would also raise the demand and value of the tokens. The Commission found that Unikrn offered and sold UKG as investment contracts, which makes them securities, however failed to register the offering or qualify for an exemption.


Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit said:

Kristina Littman, SEC

Kristina Littman
Source: LinkedIn

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. This resolution allows us to return substantially all of Unikrn’s assets to already-harmed investors and includes measures to prevent future sales to retail investors, including the disabling of the tokens.

The US watchdog found that Unikrn vioalated the federal securities law by failing to register. Without admitting or denying this, the company agreed to pay a penalty of $6.1 million. SEC’s order establishes a Fair Fund to return the money to injured investors. Unikrn also agreed to disable the token, publish notice of the order and request removal of UKG from all digital asset trading platforms.

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