Blockchain startup Block.one has agreed to pay $24 million to settle allegations that it conducted an illegal securities offering by selling digital assets.

The U.S. Securities and Exchange Commission, which has been cracking down on initial coin offerings, said Block.one violated securities laws by failing to provide a registration statement when it sold ECR-20 tokens to raise money to develop its EOSIO operating system and promote the launch of EOSIO-based blockchains.

According to an SEC administrative order, the company raised several billion dollars worth of Ether, a digital asset, by selling 900 million tokens.

“Companies that offer or sell securities to US investors must comply with the securities laws, irrespective of the industry they operate in or the labels they place on the investment products they offer,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said in a news release.

Messaging giant Kik is currently fighting an SEC lawsuit over an ICO from which it raised $100 million in 2017, arguing that securities laws do not apply to cryptocurrencies.

Block.one, however, said it was “excited to resolve these discussions with the SEC” and is “committed to ongoing collaboration with regulators and policymakers as the world continues to develop more clarity around compliance frameworks for digital assets.”

The company’s EOSIO software is designed to support public or private blockchains. It conducted its ICO between June 2017 and June 2018, saying the proceeds would be used to offer “developers and entrepreneurs the funding they need to create community driven businesses leveraging EOSIO software.”

According to the SEC, the ERC-20 tokens were securities under the federal securities laws in part because investors “would have had a reasonable expectation of obtaining a future profit based upon Block.one’s efforts, including its development of the EOSIO software and its promotion of the adoption and success of EOSIO and the launch of the anticipated EOSIO blockchains.”

“Block.one did not provide ICO investors the information they were entitled to as participants in a securities offering,” said Steven Peikin, also a co-Director of the SEC’s Division of Enforcement.

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