Initial coin offering (ICO) expert CoinLaunch has concurred to pay $50,000 to the Ontario Securities Commission (OSC), according to reports published on the regulator’s site dated July 24.
According to commercial litigator and previous software engineer Evan Thomas, CoinLaunch was consulted on two ICOs, BCZERO (securing funds for a Czech off-road truck racing group) and ECOREAL (raising funds for a Portuguese resort), both of which were determined to be securities. CoinLaunch purportedly made the tokens, white papers, and websites advised on the deal structure and made presentations, including to crypto exchanges for listings.
Thomas said the OSC discovered that the service was an act in the advancement of the trade of the security tokens since it was instrumental to the solicitation of investors. The consultant concurred to pay a $50,000 fine under a settlement.
The controller allegedly noted that the punishment forced was modest but suitable since CoinLaunch was not mindful of the registration prerequisites, coordinated with the regulator, and made remedial steps. Eminently, Thomas said that the startup erased the private keys giving access to the tokens it gotten as compensation. He too commented:
“Although regulators cracking down on ICOs have tended to focus on issuers, the big lesson here is that securities laws can apply to activities beyond issuing tokens, including activities that don’t involve buying or selling tokens.”
As previously reported in June, the United States Securities and Exchange Commission had gone after Canadian startup Kik for an unregistered $100 million token offering.