SEC Halts Munchee ICO for Securities Violations

Munchee Inc. has refunded tokens sold in a $15 million ICO following an investigation by the U.S. Securities and Exchange Commission (SEC)
12 December 2017   2256

The SEC announced yesterday that Munchee Inc. had provided refunds to investors after officials made contact and drew issue with its token sale, which the agency said constituted the offer and sale of unregistered securities.

Munchee Platform is a decentralized blockchain food review social platform. In October and November, Munchee carried out the offering of MUN tokens to raise about $15 million.

Munchee ICO2Munchee Platform

According to the report, the SEC argued that the MUN tokens constitute securities because they were investment contracts. The document also notes that the tokens were ultimately deemed a security regardless of their utility when the sale took place.

Even if MUN tokens had a practical use at the time of the offering, it would not preclude the token from being a security. Determining whether a transaction involves a security does not turn on labelling – such as characterizing an ICO as involving a "utility token" – but instead requires an assessment of "the economic realities underlying a transaction".

 

The SEC order

It is stated that agency first contacted Munchee on the second day of the sale and after that the company did not deliver any tokens to purchasers. The SEC decided not to impose a penalty due to the fact that ICO immediately returned the proceeds and cooperated with the investigation.

Recently, we have reported that the SEC shuts down PlexCorp ICO and files charges against the founder.

SEC to Unveil New List of Probable TON investors

One investor in this list is a ex-member of the managing board of the Bitcoin Foundation and partner of Ribbit Capital Mayer Malka
27 January 2020   477

Some names of large investors and the names of investment companies that could take part in the $ 1.7 billion token sale of the Telegram blockchain project became known, CoinDesk reportes with reference to documents issued by the US Securities and Exchange Commission (SEC) in the framework of the current proceedings.

One such investor is a former member of the managing board of the Bitcoin Foundation and partner of Ribbit Capital, Mayer Malka. He during the testimony at the beginning of the month mentioned Telegram CEO Pavel Durov.

Answering a question about whether Telegram is known for investors who can take on the role of validators in the TON PoS blockchain, Durov said:

We didn't put together a separate list of the purchasers who we would assume have experience in validating other networks, although it was obvious that certain investors… such as, for example, Micky Malka that we have discussed earlier, might… have experience in these processes of validation or at least were closely affiliated with parties that had experience in such processes.

 

Pavel Durov

Telegram CEO

In addition, Telegram Vice President Ilya Perekopsky, in one of his reports, named David Jan, the founder of ABBYY, a linguistic solutions development company, among potential investors. According to the correspondence published by the SEC, Ian asked Perekopsky if he could get an allocation in the ICO if he contacted Telegram directly without intermediaries in January 2018. “100 percent,” replied Perekopsky.

Also, TON investors could become the American funds Kleiner Perkins, Fortress, Draper Dragon, Dragoneer, DRW Holdings and Redpoint. This follows from the testimony declarations affixed by the SEC to the recent petition. In eight declarations, TON investors explain what prompted them to purchase Gram tokens. Company names have been removed from all documents, but they have remained in the file names. Sources familiar with the situation confirm that they really could take part in the ICO.

Most of the witnesses interviewed by the SEC indicated that they were interested in the possibility of supporting the Telegram project in the ICO TON, while the messenger itself does not accept funding for its main business. The announced investment amounts are on average $ 5-10 million. At the same time, Kleiner Perkins was initially offered an allocation of $ 15 million, but the company managed to agree on a twice as large investment, it follows from the submitted documents.