Seattle-based esports betting company Unikrn will pay $6.1M (£4.7M) to settle charges imposed by the U.S. Securities and Exchange Commission (SEC) on Tuesday.
The fine, which Unikrn has agreed to pay in full, indicates the company conducted an unregistered initial coin offering (ICO) for its esports betting cryptocurrency UnikoinGold (UKG) between June and October 2017. In total, the securities offering raised $31M (£23.8M) for the Mark Cuban and Ashton Kutcher-backed company.
The $6.1M penalty represents “substantially all of the company’s assets,” the SEC said in a news release. In addition to returning money to UKG investors, Unikrn has agreed to disable the crypto coin and request its removal from all digital asset trading platforms. In a statement, Unikrn said the SEC “established guidelines which, applied retroactively, raised many questions with regards to the future of UKG.”
“Unikrn’s priority was in growing and innovating the Unikrn platform while trying to find common ground with the SEC that would allow us to promote the merits of UKG,” the company said. “Short of that, our other option was to reach settlement on UKG’s past and discontinue it moving forward so that our energies could be effectively directed.”
Unikrn ran into a similar legal quarrel in August 2018 which alleged the cryptocurrency bypassed security measures violating SEC regulations. The class-action lawsuit argued the public crowd sales of UKG were a financial investment, setting the expectation tokens would increase in value.
Outside of this mishap Unikrn, founded by veteran entrepreneur Rahul Sood, has remained one of the most prominent esports wagering companies. In 2017, the company entered a partnership with MGM Resorts International and has continued to innovate around blockchain-based trading and new forms of esports wagering.
Esports Insider says: The SEC’s decision to charge Unikrn seems warranted, despite the company appearing to have good intentions around UnikoinGold. While an unfortunate circumstance, we can appreciate Unikrn’s swift response and promise to reimburse UKG investors for any potential injuries.