The Securities and Exchange Commission made another show of strength in the virtual currency market by shutting down an initial coin offering on Monday.
The SEC halted the initial coin offering by Munchee, Inc., a California-based company that was trying to raise $15 million to improve a restaurant meal review app for iPhones by creating a virtual ecosystem in which users could buy and sell services on their platform using digital coins.
Rutan & Tucker’s Marc Boiron said it’s surprising some individuals still fail to understand how their initial coin offerings may run afoul of securities laws.
“One thing they noted,…if this was a utility token, why wasn’t it marketed to [Munchee’s] users?” Boiron said. He observed that Munchee’s marketing materials, which were explicitly directed to the cryptocurrency community, described the token as an investment opportunity.”