Approximately nine months after the Securities and Exchange Commission (SEC) imposed a fine of $6.1 million on Unikrn, Inc for an unregistered initial coin offering (ICO), the regulator has not come up with a plan for the distribution of the money.
On June 17, 2021, the Division of Enforcement was granted with additional time to prepare such a plan. The Division’s request for an extension of time until March 31, 2022 to submit a Proposed Plan of Distribution was granted.
Let’s recall that, in September 2020, the Commission announced charges against Unikrn Inc for conducting an unregistered initial coin offering (ICO) of digital asset securities. Unikrn agreed to settle the charges by paying a $6.1 million penalty, substantially all of the company’s assets, to be distributed to investors through a Fair Fund.
According to the SEC’s order, between June and October 2017, Unikrn raised approximately $31 million through its offering of the UnikoinGold (UKG) token. The order finds that Unikrn planned to use the offering proceeds to make more features available on the gaming platform and to develop additional applications for the UKG tokens.
Unikrn promised investors that it would facilitate a secondary trading market for the tokens and that its efforts to increase the usages for the UKG token would increase demand for and in turn, the value of, the tokens. Unikrn offered and sold UKG as investment contracts, which constituted securities, yet failed to register the offering or qualify for an exemption.
Unikrn was found to have violated the registration provisions of the federal securities laws. On top of the fine, Unikrn agreed to disable the UKG, publish notice of the order, and request removal of UKG from all digital asset trading platforms.