Paragon is the latest to earn the ire of the SEC…
The American Securities and Exchange Commission is continuing its crackdown on the cryptocurrency industry. And it’s now issued a fresh ruling declaring that the Paragon Coin (PRG) was an “offering of securities”. What’s more, it’s hit it with a cease and desist order.
Paragon hit the headlines at the start of the year when it was served with a lawsuit following the successful raising of some $70m via an initial coin offering (ICO). Founded by Jessica VerSteeg, the Paragon Coin also gained profile when it attracted the endorsement of rapper The Game. The aim of the Coin was to tackle “real problems in the cannabis industry”, leading it to be described as a ‘potcoin’.
Its ties to the marijuana world likely interested regulators anyway, but the SEC ruling has found that “Paragon Offered And Sold PRG Tokens In Violation Of The Securities Act”. And the SEC isn’t happy.
As part of the ruling, that you can read here, the onus is now on Paragon to issue a press release that details the SEC order, and includes a link to a claim form for investors. PRG tokens must also be registered as securities, and Paragon has 60 days to notify claimants of the claim form and their right to sue “to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if [the purchaser] no longer owns the security”.
At the time of writing, there’s been no official word from Paragon on the matter. Inevitably, any other US token sales are likely to come under the spotlight of the SEC as it continues its work. Will they all be regarded as securities going forward?