In mid-August 2019, SimplyVital Health settled with
the U.S. Securities and Exchange Commission (SEC) after its ICO was alleged to
have been an unregistered securities offering. The ICO raised over $6 million, which
has now been returned to investors.
and the SEC Explained
From late 2017 to early 2018, SimplyVital Health hosted an
Initial Coin Offering (ICO) which raised over 15,200 ETH— valued at nearly $6.3
million at the end of the ICO.
According to the SEC, “at
least 13,800 ETH (more than $5.2 million USD) came from purchasers with whom
the company had not taken reasonable steps to verify accredited investor status”.
The SEC claimed the ICO was an unregistered securities offering,
and therefore required the company to take the extra steps to ensure its
investors were financially prepared to suffer losses.
Now however, the two have reached a settlement. SimplyVital Health says they can proceed to “refocus on developing blockchain-based solutions to emerging value-based healthcare programs”.
According to the company’s CEO, Kat Kuzmeskas,
“We are pleased to put this matter behind us and are looking forward to the next stage in SVH’s evolution. Recently, SVH launched its ‘sana’ services design with the goal of enabling physicians participating in the Centers for Medicare and Medicaid Services value-based care program to provide improved care while minimizing financial penalties.”
As a result of its interaction with the SEC,
SimplyVital Health returned all funds raised during the ICO to investors back
in January 2019.
The SEC said it decided not to pursue a civil
penalty due to the actions taken by the company.
from ICOs to STOs
The news comes as SEC Chairman Jay Clayton has
voiced his opinion that nearly all ICOs, minus
Ethereum, constitute securities offerings.
As a result, the
ICO continues to disappear. Yet, at the same time, the security token has
In differing from the ICO, the Security Token Offering (STO) explicitly declares itself a securities offering. The STO thereby algorithmically enforces regulatory compliance while bringing the benefits of blockchain technology to traditional financial securities.
So far, the STO has been leveraged to
compliantly raise nearly
$1 billion through regulated real-world assets to include equity,
estate, and fine
What do you think about the SEC settling with
SimplyVital Health? Let us know what you think in the comments section below.
Image courtesy of the SEC.