The U.S. Securities and Exchange Commission, or SEC, recently announced its conquest over yet another unregistered ICO from 2017.

The SEC went after Enigma for its 2017 ICO, labeling the capital raise as an unregistered securities offering, the governing body said in a statement on Feb. 19.

Enigma settled with the SEC, agreeing “to return funds to harmed investors via a claims process, register its tokens as securities, file periodic reports with the SEC, and pay a $500,000 penalty,” the statement detailed.  

“This settlement, which is the culmination of an extended series of discussions with the SEC, clears the way for our development team to return its full attention and energy to our original and continued vision,” Enigma CEO Guy Zyskind told Cointelegraph. Enigma plans to continue operations, Zyskind said, adding that the company recently started up its mainnet.

Responding to Cointelegraph’s request for clarity on investor refunds, an SEC representative referred to page five of its order on the proceedings, according to which ENG purchasers will have the right to request a refund with interest. However, those content with their investment will be able to hold onto their ENG tokens as Enigma simply ups its public reporting requirements.

Enigma saw major funding in 2017

Enigma raised $45 million selling its ENG token, finishing its ICO sale in September 2017. Approximately one year after its ICO, the decentralized internet privacy solution even partnered with mainstream powerhouse Intel for tech privacy exploration and advancement.

According to its recent statement, the SEC classified ENG tokens as securities and pointed out the commission received no filing from Enigma for its tokens during the ICO.

The SEC ordered investor compensation

“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones,” SEC Boston branch Associate Director for Enforcement John Dugan said in the statement. He added:

“The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”

ENG, however, has not seen any notable price decline as of press time, according to CoinMarketCap data.

Since 2017, Cointelegraph has reported numerous SEC coin offering crackdowns, including an ongoing case with Telegram and its related GRAM asset. 

UPDATE Feb. 19, 19:21 UTC: This article has been updated with information Cointelegraph received from the SEC after initial publication.

UPDATE Feb. 20, 19:16 UTC: This article has been updated with information Cointelegraph received from Enigma after initial publication.