SEC Shuts Down Blockchain Jobs Platform Boon.Tech, Imposes $5.75M Fine

The US top regulator has stepped in to penalize yet another 'initial coin offering' (ICO) after its operators failed to register their tokens as a security. The firm, Boon.Tech and its chief executive officer, Rajesh Pavithran, is said to have raised close to $5,000,000 following an ICO that began in 2017.

The SEC claims that the offering ran afoul of securities laws because the vehicle offered could be considered securities, and thus the principles should have registered with the SEC as broker-dealers.

As part of the settlement, Boon.Tech will surrender the $5,000,000 raised in the ICO plus prejudgment interest of $600,334. Further, CEO Pavithran was permanently barred from the industry and will also pay a fine of $150,000.

The Boon.Tech project was touted as a Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term job portal that offers a free platform where employers and freelancers can meet to carry out transactions involving freelance services with cryptocurrency rewards.

Boon Tech's founder promoted its native token, Boon Dollar, as a stable coin that does not fluctuate like other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term since it is hedged against the US dollar. He also falsely claimed that his company has a patent pending hedging technology incorporated in its platform so that freelancers will know upfront the amount of remuneration in USD before committing to a job.

Additionally, the US-based recruiting firm has been operating since 2018 and expanded its presence to the Middle East, with the opening of an international office in Dubai, UAE.

Regulatory Status of Cryptos Remains Murky

As explained in the court order, the SEC determined that Boon.Tech amounted to selling securities without filing a registration or qualifying for a registration exemption.

The SEC has taken enforcement actions against a dozen companies, putting their offerings on hold after issuing warnings. Further, it has frozen the assets of several cryptocurrency firms, halted ICOs, and suspended trading.

Earlier this year, Hester Peirce, an SEC regulator dubbed 'CryptoMom', has floated the idea of offering a ‘safe harbor’ to ICOs so that some crypto tokens are not treated as securities. Peirce proposed a three-year grace period for cryptocurrency startups to tweak their token-based fundraising models in new directions. As such, crypto tokens meeting specified criteria could be issued more freely before the SEC determine whether they need to comply with the federal securities laws.