Esports betting operator Unikrn has agreed a settlement worth $6.1m with the US Securities and Exchange Commission (SEC) after it was found to have carried out an unregistered initial coin offering (ICO) of digital asset securities.
According to the SEC, Unikrn raised approximately $31m through its offering of the UnikoinGold (UKG) token between June and October 2017.
The SEC said Unikrn had planned to use proceeds from the offering to increase the amount of features available on its gaming platform, as well as to develop additional applications for the UKG tokens.
However, the SEC also found Unikrn had promised investors it would facilitate a secondary trading market for UKG tokens, while its efforts to increase the use of UKG tokens would boost demand and, in turn, the value of the tokens.
As such, the SEC ruled that Unikrn offered and sold UKG as investment contracts, which constituted securities, but did not register the token offering or qualify for an exemption.
Unikrn did not admit or deny the charges, but did agree to pay the settlement in full. The agreement will see Unikrn establish a ‘Fair Fund’, which will return this money to investors impacted by the offering.