The Securities and Exchange Commission (SEC) has penalized Russia-based analytics company ICORating for failure to reveal payments for positive reviews to different projects.
The SEC revealed August 20 a $268,998 settlement with ICORating for projects evaluated from December 2017 through July 2018. The SEC said ventures evaluated by ICORating amid that time secured funds through specific initial coin offerings which the SEC identifies as securities. As such, appropriate disclosures ought to have been made to potential investors.
A platform for rating investments in ICO-based initiatives, ICORating lists numerous team members from conspicuous cryptocurrency ventures like NEO and even Binance’s CEO Changpeng Zhao. No firm members were charged within the SEC settlement.
Melissa Hodgman, Associate Executive of the SEC’s Enforcement Division, said in a statement that ICORating abused Section 17(b) of the Securities Act of 1933:
“The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item. This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain.”
ICORating concurred to pay $106,998 in interest and a civil penalty of $162,000 without giving comments on the SEC’s findings.
August has demonstrated to be an active month for the U.S. regulator. Last week, the SEC charged New England-based SimplyVital Health for avoiding to register a $6.3 million ether (ETH) pre-sale of its HLTH tokens. On August 13, the SEC took action against two other ICO-based ventures, PlexCorps and Reggie Middleton of Veritaseum.