Another ICO issuer settles with the SEC as the long tail of enforcement continues to wag

Quick Take

• SEC settles with Enigma over a 2017 ICO that raised $45 million in a Reg D SAFT sale followed by a one-day public sale 
• The settlement shows a continued willingness by the agency to allow substantial issuers, in non-fraud cases, to continue as businesses if they register and pay fines
• The order has a template-y feel to it and – given the fact that two years have passed since the height of the ICO craze – portends a substantial number of additional settlements in the coming 6 to 9 months.
• The case also presents an interesting counterpoint to the hotly-contested Telegram litigation in New York federal court, given the absence of a “consumptive token” at the time of issuance. Whether or not that will be a dividing line for future cases on a token’s status as a security remains to be seen.