Thor Technologies and its key persons became the latest targets of the US Securities and Exchange Commission (SEC) as they were charged for carrying out unregistered securities offerings.
As per the charges, the firm had been involved in the sale of coins for raising funds for its ‘gig economy platform’ back in 2018, when it had not even started its development.
The former CTO and co-founder of Thor Technologies, Matthew Moravec, and its CEO and co-founder David Chin have been charged, along with the company itself.
The SEC claims that the initial coin offering (ICO) that was conducted by the company was actually an unregistered securities offering.
According to the complaint of the SEC, ‘Thor tokens’ were sold by Chin and his firm to the general public in order to raise capital for the business.
The said business was to develop a software platform for the firms and workers of the ‘gig economy’. The regulator further asserted that they had marketed the tokens sold as an investment opportunity.
It asserted that the company and its co-founders had claimed that the tokes would be listed on crypto trading platforms later on and had also promised a potential increase in their value in the future.
Other allegations from the SEC include that there had not been any development work carried out on the Thor platform when the offering had been carried out.
It said that the tokens that were sold in the offering could not be used elsewhere. The company raised a total of $2.6 million from investors in crypto and fiat.
The SEC also added that they had not registered the sale with the securities regulator and there was no exemption applicable to it either.
The complaint has been filed by the SEC in the Northern District of California against Thor and Chin and the Commission is asking the US District Court for injunctive relief, civil penalties as well as the return of the illicit gains along with prejudgment interest.
As far as Matthew Moravec is concerned, there has been a second complaint filed against him for his involvement in the said unregistered coin offering and sale.
He has already agreed to a settlement with the SEC and accepted a judgment that requires him to pay a sum of $407,103. He will also pay civil penalties worth $95,000 and $72,209.45 in prejudgment interest.
In addition, he will not be permitted to participate in any crypto asset offerings for about three years. This announcement from the SEC came after Gary Gensler, the chairman, had talked about this topic earlier this month.
The SEC boss had said that compliance is needed for these crypto security tokens and added that the crypto market and the securities law were quite compatible.
He had also said that since crypto was currently a non-compliant market, there were a number of risks associated with it.
It should be noted that the SEC filed a similar lawsuit against Ripple Labs and its executives for their XRP token about two years ago and it is still ongoing.