US SEC on the go against another crypto start-up, Tierion for offering securities in the US market that are unregistered. Tierion sold US$ 25 Million worth of its initial coins but later ordered to refund the investors and suspend tokenized trade.
A newest tokenized crypto assets were introduced in the US market by Tierion Inc. under the name TNT in 2017. In the start-up, Tierion managed to sell US$ 25,000 Million worth of TNT amongst the US consumers/investors. However, the Securities & Exchange Commission (SEC) of the US soon took notice of the newly launched TNT.
It was reported thereafter that SEC conducted an investigation regarding the nomenclature of the TNT tokens. It was informed by SEC that TNT were “securities” and required to be registered before they could have been put for sale. Thereafter, SEC leveled charges against Tierion that it had violated the US law of securities and therefore acted illegally.
SEC explained that Tierion had committed to the investors that it would develop an exclusive blockchain network for TNT holders. SEC also apprised that the funds generated from TNT’s initial sale proceeds were to be used in the development of that network. But the TNT tokens were alleged to be “securities” by SEC and therefore unregistered securities cannot be sold or purchased, said SEC. Until December 23rd, 2020, TNT was being traded for US$ 0.0064 however, the value dropped by US$ 0.0042 as of today.
However, Teirion had agreed to settle the dispute with the SEC and decided to cease and desist from TNT trading. SEC directed Teirion to refund the money back to its original owners and imposed a penalty of US$ 250,000 upon Teirion. It was also directed by SEC that in order to satisfy the settlement, Teirion will ensure compensation to TNT holders.
Wayne Vaughan, CEO of Teirion also told that they had been allowed a waiver though. As per the waiver until the settlement arrangement had not been fulfilled, TNT will not be regarded as securities by SEC.
Meanwhile, a day before, SEC had leveled charges against Ripple and its higher officials. The charges alleged that Ripple had illegally sold US$ 1.3 Billion worth of XRP in the US market. XRP was too labeled as “securities” by SEC and therefore its trade in US was termed as illegal.
On the other hand, Ripple strongly contested that the tokens offered by it cannot be treated as securities. It was contended by Ripple that since its birth XRP had been treated as currency similar to Ethereum and Bitcoin. Garlinghouse argued that it cannot be the law that XRP had been treated as currency in the rest of the world. He added that butXRP is being treated as securities in the US for some reason. Either the rest of the world or the US regulator had misunderstood the law completely, he said.
