Thursday, March 29, 2018

Massachusetts conducts cryptocurrency sweep, censures five companies

By Jay Fishman, J.D.

The Massachusetts Securities Division, upon completing a sweep of unregistered cryptocurrency transactions, censured five companies and additionally ordered them to permanently desist from selling unregistered or non-exempt securities in the state. The companies, for failing to either register or claim an exemption for their respective initial coin offerings, entered into settlement offers with the Division. The Division determined that the unregistered, non-exempt coin offerings fell within the “security” and “investment contract” definitions of the Massachusetts Securities Act and rules.

Company cryptocurrency offerings.
  1. 18Moons, Inc., a children’s programming company, planned to offer up to 100 million in planet kid coins to potential purchasers in late 2017 but ceased operations upon receiving a Division subpoena on January 25, 2018 (In the Matter of 18Moons, Inc., March 27, 2018). 
  2. Across Platforms, Inc., d/b/a ClickableTV, planned to initially offer up to $100 million ClickableTV tokens, with a hard cap of $27.5 million, on March 1, 2018 but stopped the offering upon receiving a Division subpoena on February 7, 2018 (In the Matter of Across Platforms, Inc., March 27, 2018). 
  3. Mattervest, Inc., used Twitter to provide potential customers with links to a weekly newsletter listing the latest investment pool deals but ceased operations when it received an inquiry letter from the Division on January 31, 2018 (In the Matter of Mattervest, Inc., March 27, 2018).
  4. Pink Ribbon ICO, a publicly traded company on the blockchain that supports women and families facing financial burdens from Cancer, stated on its Facebook page an intent to trade $5 million coins on the open market, but took down the page after receiving a Division inquiry letter on February 2, 2018 (In the Matter of Pink Ribbon ICO, March 27, 2018). 
  5. Sparkco Inc. d/b/a Librium ICO planned to expand its existing freelance platform operations by pre-selling its services through an initial cryptographic token offering on December 8, 2017. The company, however, postponed the offering indefinitely upon received a Division subpoena on February 5, 2018 (In the Matter of Sparkco, Inc., March 27, 2018). 
The docket numbers are E-2081-0010, E-2018-0016, E-2018-0011, E-2018-0029 and E-2018-0017.