Cannabis focused blockchain startup Paragon (Paragon Coin) has issued a press release following the Securities and Exchange Commission’s (SEC) announcement last week that Paragon had settled with the SEC regarding charges of issuing an unregistered security.
Paragon was one of two ICOs that were deemed to have transgressed existing securities law. Paragon sold their PRG coin and allegedly raised $12 million following their ICO which took place post-DAO report.
Paragon CEO and co-founder Jessica VerSteeg, stated:
“Paragon is making history! We’re excited to announce an important settlement we’ve been working on for over a year — a very positive agreement with the US Securities and Exchange Commission that will effectively put an end to the uncertainties of the legal status of our PRG tokens. Working shoulder to shoulder with an amazing team of lawyers from Schulte Roth & Zabel LLP, as well as an extremely knowledgeable team at the SEC, we have been able to reach this trailblazing deal that we expect will serve as the model for compliance for ICOs going forward.”
Paragon notes that under the terms of the settlement, the company will be given the opportunity to pursue registration of the PRG tokens as a class of securities under Section 12(g) of the Securities Exchange Act of 1934 by filing a Form 10. In effect, Paragon may become an SEC reporting company required to file the multitude of documents required by the SEC.
Additionally, Paragon must pay a penalty to the SEC and allow “certain eligible ICO purchasers to elect to obtain a payment for purchases of PRG tokens before and including October 15, 2017.”
VerSteeg said the resolution “gives Paragon the path forward to full compliance with the U.S. securities laws and clears the way for Paragon to pursue its vision of bringing transparency and accountability to the cannabis industry through blockchain technology.”
“Paragon is proud that the PRG token is included in today’s action by the SEC and are thereby being granted the opportunity to avail itself of this groundbreaking path forward while continuing to pioneer efforts and to participate in the ever evolving ICO marketplace. We believe many purchasers of PRG tokens share our vision of revolutionizing the cannabis industry through blockchain technology, and this action today is an important step in solidifying our compliance and furthering developments of our state-of-the-art cannabis seed-to-sale technology platform and co-working space.”
The release also shared several accomplishments the company had achieved since the ICO including a Cannabis co-working space in LA and certain software solutions.
But becoming a registered company can be an expensive venture for Paragon. Several tweets by Philip Liu, a securities attorney and co-founder of Arca, threw some cold water on the celebration at Paragon.
This is such a ridiculous press release and so misleading. Do these guys not know that having to register as a public company is at least a $750,000 a year proposition? Plus the fact that they have to return their I’ll-gotten proceeds? Plus the $250,000 fine? https://t.co/vpn4KbB1iw
— Philip Liu (@PhilipLiu) November 18, 2018
I have no words… pic.twitter.com/8nwwxK7QUx
— Philip Liu (@PhilipLiu) November 17, 2018
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Source: ICO Inc News