The SEC Dismisses Airfox and Paragon, Rendering Them Illegal

The SEC Dismisses Airfox and Paragon, Rendering Them Illegal
ICO News

In November 2018, the Securities and Exchange Commission (SEC) of the United States launched harsh penalties related to the initial coin offerings (ICOs) against Airfox (AIR) and Paragon (PRG).

Both are ordered to return all their investments and have been slapped with a $250,000 fine, which will probably result in bankruptcy.

The two ICOs overlooked the SEC’s warning, which was issued in July 2017, indicating that ICOs can be considered securities and must register with the SEC and be in compliance.

The fact remains that the SEC has approved not even one ICO according to the chairman, Jay Clayton, effectively ruining an entire section of the cryptocurrency space.

There is still no direct registration process for ICOs, with the official website of the SEC exuding a big warning to all the investors to stay clear of ICOs, and attaching a link to a list to ICOs and token exchanges that the SEC has terminated so far.

The SEC came to a milestone decision in July 2017, in its case against a Decentralized Autonomous Organization (DAO), which is operated by Slock.it. It was made clear that cryptocurrency is a security when it is issued by an organization, the investors purchase the cryptocurrency from the organization, expecting profits and the profits would be directed by efforts of the organization that issues the cryptocurrency.

Practically, every ICOs comes under the definition of security. The cryptocurrencies that launch after the July 2017 decision are at the risk of SEC enforcement and will be classified as securities, regardless of their launch date.

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