SEC Wins Case Against Thor Technologies over Unauthorized Crypto Sales
Summary:
In a dispute over unregistered crypto asset securities sales, Thor Technologies and its founder, David Chin, faced a legal blow from the U.S. Securities and Exchange Commission (SEC). The SEC succeeded after a default judgment against Chin and Thor. In between March and May 2018, they raised $2.6 million for a software platform intended for gig economy businesses. However, the SEC contends these funds, secured through unregistered Thor Tokens, violated federal securities laws. Chin and Thor also allegedly provided misleading project information to investors. After ceasing operations in 2019, Chin vowed to repay investors but instead diverted some funds into his account. As part of the judgment, they must pay $903,193.06 and are prohibited from future crypto asset securities offerings.
A significant legal defeat has struck Thor Technologies and its founder, David Chin, in a protracted conflict with the U.S. Securities and Exchange Commission (SEC) concerning the unauthorized sale of $2.6M in crypto asset securities. After a default judgment was issued against Chin and Thor by a district court in San Francisco on Wednesday, Oct.18, the SEC announced its triumph on Oct. 19. A default judgment is essentially a court-issued decision in response to one party in a lawsuit's failure to respond or defend their case within the legally established timeline. This commonly takes place when a defendant fails to reply to a plaintiff's accusations or neglects to appear in court when required.
As detailed in the complaint submitted by the SEC on December 21, 2022, Thor Technologies, led by Chin, gathered $2.6 million from roughly 1,600 investors between March and May 2018. The raised funds were destined for the development of a software platform designed for gig economy businesses and individuals. The SEC alleges that Thor Tokens' sales and offers were not registered with it and were misleadingly promoted as investment possibilities.
These funds were procured through the sale of the Thor (THOR) coin, with around 200 of those investors based in the United States. According to the SEC, Chin and Thor breached federal securities laws by issuing and selling unregistered Thor Tokens without complying with exemption requirements. Additionally, the SEC charged Chin and Thor with furnishing investors with misleading and false information about the project's progression, partnerships, and revenue.
After stating in April 2019 that operations ceased due to regulatory barriers, Chin pledged to reimburse investors while planning a strategy. However, the SEC discovered that Chin had not returned any funds to investors, instead diverting some of the earnings into his personal account.
The judgment has ordered them to pay a total of $903,193.06, including a disgorgement of $744,555 and prejudgment interest of $158,638.06. This sum represents the total revenue collected from investors minus what they paid back.
Permanent injunctions have also been imposed upon Chin and Thor, prohibiting them from participating in any future crypto asset securities offerings. However, Chin still possesses the right to purchase or sell securities for his personal use.
Published At
10/20/2023 11:30:03 AM
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