Part of the Someone is wrong on the internet series

By Jamie Powell From Financial Times

In the year between June 2017 and 2018, Block.one — an unspecified blockchain platform — raised several billion dollars from an initial coin offering.

Yes, that’s billion with a capital B.

The Cayman Islands start-up had no live product at the time, which reminded Alphaville of a company that raised money during the South Sea Bubble “for carrying out an undertaking of great advantage, but nobody to know what it is”. The money was raised in the form ether, according to CNBC. The price of which has come down significantly since last year.

Which brings us to news from the SEC overnight:

The Securities and Exchange Commission today announced settled charges against blockchain technology company Block.one for conducting an unregistered initial coin offering of digital tokens (ICO) that raised the equivalent of several billion dollars over approximately one year. The company agreed to settle the charges by paying a $24 million civil penalty…

…Block.one did not register its ICO as a securities offering pursuant to the federal securities laws, nor did it qualify for or seek an exemption from the registration requirements.

Block.one consented to the order without admitting or denying the SEC’s findings.

We’re not sure about you, but a civil fine of $24m for raising billions of dollars outside of security law strikes us as pretty damn pathetic.

It does beg the question; what’s the incentive for a company to conform to securities law if a slap on the wrist is all that’s going to come of it? We’d venture: there isn’t much of one at the moment.

But whatever, we’re sure the public will go on believing in the integrity of financial markets regardless. It’s not as if, a decade or so after the financial crisis, it still has a reputation problem.

We asked the SEC about the fine, and we’ll update the article if we hear back from them.

For more on this story go to; https://ftalphaville.ft.com/2019/10/01/1569929852000/Block-one-headed/