American firm CryptoFED’ token registration halted by SEC agency
The United States regulators refused to give regulatory approval to the tokens issued by the CryptoFED.
CryptoFED is the first American Wyoming based fully legalised blockchain firm in America. On 16 September, CryptoFED filed with the US securities and exchange commission (SEC) to give regulatory approval for the two tokens (Ducat and Locke token).
The enforcement department of the SEC agency said that there is a need for more and proper information about the filling of the two tokens. Agency also said that there are a few misleading things in the filing about the two tokens.
According to the agency, the form for Locke is inconsistent with the rules because it is filed under Form S-8. And in the S-8 form, securities are those tokens that can be distributed to only the employees, not to the Public. In the form, CryptoFED mentioned that they will distribute Locke to the public, so this is contrary to the rules.
Kristina Littman-chief of the SEC Enforcement Division’s Cyber Unit- elaborated about this issue and said
“Issuers attempting to raise money from the public must provide the information necessary for investors to make informed decisions”
Further, Kristina said that CryptoFED failed to provide better clarity under a system Legal procedure. And this filing was improper to give required information about the token.
Kristina also said that now the SEC administration will further decide whether they should suspend or revoke the filing. And the decision for this will be taken by the administrative law judge to keep the protection of investor interest.
On 10 November, Capital.com reported on this matter and claimed that the SEC agency emailed about the CryptoFED filing and urged them to withdraw the application.
“We will not perform a detailed examination of the filing, and we will not issue comments on the filing at this time. We suggest that you consider filing a substantive amendment to correct the deficiencies.”, email read on 8 November
Probably, this situation for the CryptoFED is measurable. But mistakes of the CryptoFED company is a clear indication that they are lagging to understand the legal procedure to get approval and they are not able to understand how they can categorise the tokens. Probably they need to do a more deep study on the new securities token bill of the SEC.
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