In a victory against the crypto industry, the U.S. National stock market Commission (SEC) obtained a default judgment against Thor Technologies and its founder David Chin.
According court documentsThor Technologies and Chin were found guilty of conducting an unregistered offering of cryptoasset securities worth $2.6 million.
SEC prevails in lawsuit over unregistered cryptocurrency offering
The sentence was issued by a San Francisco District Courtwhich permanently restricts and prohibits 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 calls “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 of the parties (SEC) when the opposing party does not respond or appear in court.
It occurs when the defendant in a lawsuit fails to file an answer, reply, or defense within the specified time or fails to appear in court after being properly served with a summons and complaint.
Furthermore, the court ordered Thor and Chin to refrain from participating in any “cryptoasset securities offering”. However, the court order 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 disgorgement of $744,555, along with prejudgment interest of $158,638.06. Both Thor and Chin must also pay civil penalties of $150,000 each.
Thor Technologies accused of fraudulent token offering scheme
The SEC complaintfiled 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 to fund Thor’s software platform for gig economy workers and businesses.
The complaint further accuses Thor and Chin of promoting the tokens as investment opportunities and claiming that they would be available for trading on “cryptoasset platforms.”
However, the SEC alleges that at the time of the offering, no development work had been done on the Thor platform and there was no practical use for the tokens.
The court’s default judgment supports the SEC Claims v. Thor Technologies and Chin. They are permanently prevented from violating securities registration provisions, and the sanctions and disgorgement ordered are intended to hold them accountable for their alleged “fraudulent actions.” The SEC retains jurisdiction over the case to ensure compliance with the ruling.
As of today, the total market capitalization of cryptocurrencies has recovered to reach the milestone of $1.10 trillion. This level had not been observed since October 2.
This resurgence in market value highlights a significant recovery in the overall cryptocurrency market.
Featured image from Shutterstock, chart from TradingView.com
