Through a press release dated 15th September, the United States Securities and Exchange Commission (SEC) has announced that esports betting company Unikrn has been fined for over $6 million over unregistered Initial Coin Offerings (ICO).
Despite not agreeing or denying the wrongdoing, the Seattle-based startup has agreed to pay the fine of $6.1 million to settle the complaint by the SEC.
Unikrn was founded in 2014 and is a platform to bet real money or tokens over competitive video game matches.
In 2017, the company came up with the allegedly unregistered ICO UnikoinGold (UKG), and raised over $31 million in sales, promising investors that the coin would increase in value in the course of time.
“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,” Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said. “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.”
Unikrn is required to set up a Fair Fund to return money to the investors. The company also has to shut down UKG, and request the removal of UKG from platforms involving trading of digital assets.