CoinLaunch, an ICO consultant that exists with the cryptocurrency space, has recently agreed to paying $50,000 to the Ontario Securities Commission (OSC), the company made public via documents on its website.
An Uncertain Assistance
As reported via CoinTelegraph, the company had recently consulted on BCZERO and ECOREAL, two ICOs that ended up being securities. The former was looking to raise money for an off-road truck racing team in the Czech, while the latter is trying to gather money for a Portuguese luxury resort. Two very different projects all looking to make use of blockchain technology and cryptocurrency.
According to the group, CoinLaunch helped create the assets, whitepapers, websites, and everything else required for each project. They even helped each team create sales methods, ensure important people met other important people, and even pitched each project to different cryptocurrency exchanges.
However, a commercial litigator, Evan Thomas, believes that the OSC found something fishy regarding the project policies.
To start, CoinLaunch’s services were essentially to assist in the online trading of security tokens, since it helped so much with each project. As you may know, security tokens are defined as when a company is directly benefitting from a specific asset, unlike Bitcoin or Ethereum, where there is no central authority behind either.
Fortunately, CoinLaunch is will to pay the $50,000 fine in which they are being charged.
That said, the number isn’t as high as you may expect. According to the regulator, this fine was “modest” considering CoinLaunch didn’t know about the policies they were violating. They agreed to cooperate to make life easier for both parties.
On top of this, Thomas says that the company deleted the private keys that provided access to the cryptocurrency wallets that stored the assets they were given in compensation. He added:
“Although regulators cracking down on ICOs have tended to focus on issuers, the big lesson here is that securities laws can apply to activities beyond issuing tokens, including activities that don’t involve buying or selling tokens.”