ParagonCoin Deregistered by SEC for Violating the Securities Law

03/10/2023 08:24 • Digital Disruptors • 84 views

On March 10, it was reported that ParagonCoin, a crypto startup supported by American rapper Jayceon Terrell Taylor (the stage name is The Game), was deregistered by the United States Securities and Exchange Commission (SEC) because it failed to submit periodic reports and violated the securities law.

The encryption company ParagonCoin supported by the American rapper The Game was deregistered by the SEC

Analysis based on this information:

The United States Securities and Exchange Commission (SEC) deregistered ParagonCoin, a cryptocurrency startup backed by American rapper The Game, on March 10. The reason behind deregistration was the company’s failure to submit periodic financial reports and potential violations of the securities law.

The SEC is a federal agency responsible for enforcing laws that regulate the securities industry, which includes the trading of stocks, bonds, and other investments. The agency monitors and investigates illegitimate business activities and violations of the securities law to protect investors and ensure market integrity.

In the case of ParagonCoin, SEC’s investigation results showed that the company raised approximately $12 million by selling unregistered securities through an initial coin offering (ICO) in 2017. The ICO was marketed as a way to fund the development of a blockchain-based platform for the cannabis industry.

However, ParagonCoin failed to register their tokens as securities, as required by federal law, and did not provide investors with adequate information about the investment or possible risks. Furthermore, the company did not disclose the involvement of certain celebrities, including The Game, in the ICO, which can be considered a fraudulent activity.

The SEC required ParagonCoin to comply with the securities law and register their tokens as securities, but the company failed to do so. As a result, the SEC imposed penalties on the company and ordered them to return the funds to investors. The SEC also ordered ParagonCoin to file periodic reports to provide investors with accurate and up-to-date financial information, but the company failed to comply with this requirement too, which resulted in deregistration.

The deregistration means that ParagonCoin is no longer recognized as a legally operating company by SEC, and it cannot offer securities or conduct any business activity related to securities until it fully complies with the securities law. The Game, a celebrity endorser of ParagonCoin, has not made any comments on the SEC’s enforcement actions.

In conclusion, the SEC’s deregistration of ParagonCoin is a clear signal to other cryptocurrency startups that they must comply with the securities law and provide investors with accurate and transparent information. The case also highlights the potential risks associated with investing in ICOs, which are not regulated in the same way as traditional securities offerings.

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ParagonCoin Deregistered by SEC for Violating the Securities Law

The encryption company ParagonCoin supported by the American rapper The Game was deregistered by the SEC

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