The United States Securities and Exchange Commission (SEC) has fined and settled charges against Russian analytics website ICO Rating in the amount of $268,998 for failure to disclose payments it received to publicize digital asset offerings of issuers it had rated, according to an announcement.
In the announcement, the US Securities and Exchange Commission disclosed that it had charged ICO Rating for violating anti-touting provisions for projects rated from December 2017 to July 2018.
Particularly, the regulator claimed that ICO Rating violated the anti-touting provisions of Section 17(b) of the Securities Act of 1933 by failing to disclose payments it received from initial coin offering (ICO) issuers it rated and published on its platform.
According to the press release, ICO Rating featured ratings of tokens that the regulator deemed to be securities on its website as well as across social media. Such as projects rated by ICO Rating during that time raised funds through particular initial coin offerings (ICOs), proper disclosures should have been made to potential investors.
Associate Director of the SEC’s Enforcement Division Mellisa Hodgman explained:
“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.”
Neither admitting nor denying the SEC’s findings, the Russian-based company has agreed to cease and desist from committing any future violations of these provisions. Consequently, it paid disgorgement and prejudgment interest of $106,998 and a civil penalty of $162,000, which rounds to a total of $268,998 in damages.
Meanwhile, August has proven to be a busy month for the regulatory agency. Just 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. Without confirming or denying the allegations that it violated certain aspects of the Securities Act of 1933, the healthcare agency agreed to a cease-and-desist order imposed by the regulator.
Earlier in August, it has also been reported that the SEC reached a $7 million dollar settlement against two other ICO-based projects – PlexCorps and Reggie Middleton of Veritaseum – over an allegedly fraudulent ICO.