SEC Settles Charges Against Coinschedule Operator for Touting ICOs

SEC Settles Charges Against Coinschedule Operator for Touting ICOs

The Securities and Exchange Commission (SEC) announced today that it has settled charges against UK-based Blotics LTD, the operator of Coinschedule.com, for violating the anti-touting provisions of federal securities law.

The SEC alleges that Coinschedule, a once-popular website that profiled initial coin offerings (ICOs) from 2016 to 2019, was secretly receiving compensation from the issuers of the digital assets it was profiling.

The settled charges against Coinschedule are one in a recent series of charges brought by the SEC against operators of ICOs the regulatory body has deemed fraudulent or otherwise in violation of federal securities law. The SEC has taken an increasingly strong stance against unregistered token offerings since the ICO boom of 2017, deeming them unregistered securities.

Blotics LTD agreed to a settlement that includes a $43,000 disgorgement plus prejudgement interest, a penalty of $153,434, and an agreement to stop violating the anti-touting provisions.

Two SEC commissioners, Elad Roisman and Hester Peirce, issued a statement in response to the charges against Coinschedule that agreed with the accusations that Coinschedule was violating federal securities law by not disclosing the fact that it was being compensated. But they lamented that the settlement did not offer any regulatory clarity for other market participants.

“We agree with our colleagues that touting securities without disclosing the fact that you are getting paid, and how much, violates Section 17(b),” Peirce and Roisman wrote. “We nevertheless are disappointed that the Commission’s settlement with Coinschedule did not explain which digital assets touted by Coinschedule were securities, an omission of which is symptomatic of our reluctance to provide additional guidance about how to determine whether a token is being sold as part of a securities offering or which tokens are securities.”

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