Blockchain Company Settles With SEC Over Unregistered $6.3 Million SAFT Sale

A health care-centered blockchain firm has settled charges with the U.S. Securities and Trade Commission (SEC) in excess of its 2017 ICO.

The SEC explained on Monday that New England-centered SimplyVital Health and fitness, Inc. raised around $6.3 million in ether (ETH) by means of a pre-sale of its HLTH tokens to fund a touted “healthcare-linked blockchain ecosystem” called Health Nexus.

The pre-sale was notably provided underneath a uncomplicated arrangement for long term tokens (SAFTs) arrangement – a model supposedly built to simplify the ICO system and lower the possibility of enforcement actions by offering investment contracts relatively than tokens. Following the pre-sale, which shut in April 2018, the firm did not go ahead with the planned public featuring.

The firm marketed HLTH tokens that were being “not be delivered to traders except and right up until established by SimplyVital,” in accordance to the SEC.

The commission eventually dominated that the corporation had violated provisions of the Securities Act of 1933 by not registering the SAFT with the regulator prior to the featuring and did not qualify for an exemption from registration.

SimplyVital complied with a cease-and-desist buy from the SEC, even though not “admitting or denying the SEC’s findings.”

By April 19, 2019, SimplyVital had voluntarily returned the bulk of the funds raised from traders – a variable that the SEC explained it took into account when it made a decision not to impose civil penalties.

As documented in March 2018, market resources had informed CojnDesk that the SEC was possible heading following SAFT sales.

Just one candid source explained at the time:

“The SEC is focusing on SAFTs. The new approach of the SEC is to consider tokens as each utility and protection at the exact time, that means a token can bring utility to a platform but at the exact time can be regarded as a protection if you marketed it to get-togethers that largely seemed for financial gain on its increase in value.”

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