The US Securities and Exchange Commission (SEC) has announced its charges against the Seattle-based crypto gaming platform Unikrn regarding its initial coin offering (ICO) in 2017. Unikrn agreed to a settlement of $6.1 million.
According to the SEC, Unikrn’s UnikoinGold (UKG) token is considered as a security asset, which the latter did not register with the said authority prior to its ICO from June to October 2017.
Unikrn was able to amass up to $31 million in its ICO. Initially, Unikrn said that it would use the funds to add more features on its platform and to create additional use cases that would increase UKG token’s value in the future.
Upon investigating, the SEC concluded that Unikrn only used the token as “investment contracts”, which it considers as securities. Hence, the lawsuit.
Kristina Littman, SEC’s head of its Enforcement Division’s Cyber Unit, said that their securities registration and exemption framework was created to “ensure investor protection”, and that failing to comply with the framework “harms investors” and the markets.
This resolution allows us to return substantially all of Unikrn’s assets to already-harmed investors and includes measures to prevent future sales to retail investors, including the disabling of the tokens.
Aside from disabling the further use of UKG, Unikrn agreed to pay the $6.1 million settlement fee to investors through a Fair Fund.
Unikrn is an esports platform that enables the use of cryptocurrency for its online betting feature. Actor and crypto evangelist Ashton Kutcher and Dallas Mavericks owner Mark Cuban are some of the high-profile personalities who invested in the platform.