According to a notice published on Monday the 12th of August, the U.S. Securities and Exchange Commission has announced settled charges against a healthcare blockchain firm for a 2017 Initial Coin Offering (ICO).
The company, SimplyVital Health Inc., successfully raised about $6.3 million worth of Ether through a pre-sale of its HLTH tokens, under a Simple Agreements for Future Tokens (SAFT) system. The tokens were purportedly to be used for SimplyVital’s Health Nexus – a healthcare ecosystem powered by blockchain technology. The SEC declared that “SimplyVital did not file a registration statement with the Commission or qualify for an exemption from registration before offering and selling HLTH to the public through the SAFTs.”
The SEC then accuses the firm of a violation. According to the publication:
“The SEC’s order finds that SimplyVital violated the registration provisions of Sections 5(a) and (c) of the Securities Act of 1933.”
SimplyVital however obeyed a cease-and-desist-order given by the SEC but did not confirm or deny any of the agency’s accusations. However, as at April 19, SimplyVital had reportedly returned most of the generated funds, an action which supposedly helped its case with the Commission.
An unidentified source believes that the “SEC is targeting SAFTs.” According to the source, the commission has begun to view tokens as utilities and securities, simultaneously. This means that even though a token can have some utility on a platform, if sold to entities who buy in for want of profit, it could also classify as a security.
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