WSJ: Three ICO Startups Missed

Several firms that collectively raised about $40 million through unregulated initial coin offerings in 2017 missed their deadlines to repay investors following charges by the United States Securities and Exchange Commission.

The Wall Street Journal reported on Nov. 14 that the firms agreed to repay investors or provide more transparency in exchange for lower fines, but did not follow through.

The tardy firmsAirfox and Paragon Coin missed the original deadline to repay investors who bought their tokens, which was set for Oct. 16.

A third startup is over five months late on providing its investors the information they need to decide whether they want refunds.

Two of the three companies are mobile banking startup Airfox and cannabis blockchain platform Paragon Coin, which agreed to pay $250,000 fines as part of a settlement in November last year.

In exchange, the firms have not been accused of fraud and had to bring their offering under SEC oversight and offer a refund to investors.

The three companies were all required to submit registration statements.

Gladius, on the other hand, was required by the terms of its settlement to file the registration statement by May 20, but claims that the deadline was extended until Nov. 18.The other two companies also reportedly missed the deadline to repay investors seeking refunds, which was set for Oct 16.

Paragon's website says that investors who desire a refund should submit their claims by Nov. 21, but their settlement order set a deadline in July.

SEC documents show that both the companies may be lacking the funds to repay the investors, given that Airfox owes $15.4 million to its ICO participants and has $6.1 million in assets, including $5.4 in cash.