The U.S. Securities and Exchange Commission (SEC) has fined Russia-based analytics firm ICORating for failure to disclose payments for positive reviews to various projects.
Today the SEC announced a $268,998 settlement with ICORating for projects rated from December 2017 through July 2018. According to the SEC, projects rated by ICORating during that time raised funds through particular initial coin offerings which the SEC classifies as securities. As such, proper disclosures should have been made to potential investors.
A platform for rating investments in ICO-based projects, ICORating lists multiple team members from prominent cryptocurrency projects like NEO. No company members were charged in the SEC settlement.
In a statement, Melissa Hodgman, Associate Director of the SEC’s Enforcement Division said ICORating violated 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 agreed to pay $106,998 in interest and a civil penalty of $162,000 without commenting on the SEC’s findings.
August has proven to be a busy month for the U.S. regulator. Last week, the SEC charged New England-based SimplyVital Health for failing 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 projects, PlexCorps and Reggie Middleton of Veritaseum.
UPDATE (21, August 03:00 UTC): An earlier version of this story stated Binance CEO Changpeng Zhao was a team member of ICORating.
Settlement image via Shutterstock
https://www.coindesk.com/sec-settles-with-ico-service-over-undisclosed-payments-for-positive-reviews
