In a win against the crypto industry, the US Securities and Exchange Commission (SEC) has obtained a default judgment against Thor Technologies and its founder David Chin.
According to court documents, Thor Technologies and Chin were found guilty of conducting an unregistered offering of crypto asset securities amounting to $2.6 million.
SEC Prevails In Unregistered Crypto Offering Lawsuit
The judgment was issued by a San Francisco district court, which permanently restrains and enjoins the defendants from violating Sections 5(a) and 5(c) of the Securities Act of 1933.
These sections pertain to the sale and offering of what the SEC denominates as “crypto securities” without proper registration or exemption.
In the legal context, a default judgment is a judgment entered by a court in favor of one party (SEC) when the opposing party fails to respond or appear in court.
It occurs when the defendant in a lawsuit fails to file a response, answer, or defense within the specified time frame or fails to appear in court after being properly served with a summons and complaint.
Additionally, the court ordered Thor and Chin to refrain from participating in any “crypto asset securities offering”. However, the injunction does not prevent Chin from engaging in “personal securities transactions”.
The court imposed a civil monetary penalty of $150,000 on Chin and ordered Thor to pay a disgorgement of $744,555, along with prejudgment interest of $158,638.06. Both Thor and Chin are also required to pay civil penalties of $150,000 each.
Thor Technologies Accused Of Fraudulent Token Offering Scheme
The SEC’s complaint, filed in December 2022, alleges that between March and May 2018, Thor Technologies and Chin offered and sold “Thor Tokens” to the public as a means of funding Thor’s software platform for gig economy workers and companies.
The complaint further accuses Thor and Chin of promoting the tokens as investment opportunities and claiming that they would be available for trading on “crypto asset platforms”.
However, the SEC alleges that at the time of the offering, no development work had taken place on the Thor platform, and there was no practical use for the tokens.
The court’s default judgment supports the SEC’s claims against Thor Technologies and Chin. It permanently restrains them from violating securities registration provisions, and the ordered penalties and disgorgement aim to hold them accountable for their alleged “fraudulent actions”. The SEC retains jurisdiction over the case to ensure compliance with the judgment.
As of the current date, the total market capitalization of cryptocurrencies has rebounded to reach the $1.10 trillion milestone. This level has not been observed since October 2nd.
This resurgence in market value highlights a significant recovery in the overall cryptocurrency market.
Featured image from Shutterstock, chart from TradingView.com