ParagonCoin, a Crypto Startup Backed by The Game, Gets Deregistered by SEC for Failing to Comply with Securities Law
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 deregiste…
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:
ParagonCoin, a cryptocurrency startup backed by American rapper The Game, has been deregistered by the United States Securities and Exchange Commission (SEC) for failing to submit periodic reports and violating securities law. This development serves as a warning to other firms in this nascent industry that regulatory compliance is essential to avoid legal action by the authorities.
The SEC took this action because ParagonCoin failed to submit periodic reports after its initial coin offering (ICO) was launched in 2017. Initially, ParagonCoin raised over $12 million from investors, which was intended to fund its project of developing a blockchain platform for the cannabis industry. However, the SEC claims that ParagonCoin’s ICO was an unregistered securities offering, which is a violation of the Securities Act of 1933. The firm did not meet the criteria for an exemption from SEC registration requirements.
The Game, a famous American rapper, had publicly supported the venture and was reportedly a partner in the project. However, it is unknown whether The Game was involved in any wrongdoing or whether he was aware of ParagonCoin’s SEC violations.
The SEC’s action against ParagonCoin could have significant implications for other cryptocurrency startups that launch ICOs. ICOs are a popular way for crypto startups to raise funds by issuing and selling tokens to investors. Many ICOs have been launched without registering with the SEC or meeting the requirements for an exemption, and the SEC has been cracking down on such noncompliant offerings in recent years.
The SEC’s action against ParagonCoin highlights the importance of regulatory compliance in the crypto industry, and the need for startups to take SEC requirements seriously. Failure to do so can lead to legal action, fines, and damage to the reputation of the company and its backers. It is essential for crypto startups and their investors to understand the regulatory landscape in which they operate so that they can navigate it successfully.
In conclusion, ParagonCoin’s deregistration by the SEC serves as a warning to other firms in the crypto industry that they must comply with securities law to avoid regulatory action. The Game’s involvement in the project, while intriguing, is unsubstantiated in terms of whether he was aware of the firm’s SEC violations. Nonetheless, this episode has shown the importance of regulatory compliance in this burgeoning industry, which is still largely unregulated.
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