Legal Blow for Thor Technologies
Thor Technologies, under the leadership of its founder and former CEO, David Chin, has recently experienced a significant hiccup in its operations. The United States Securities and Exchange Commission (SEC) has handed down a default judgment against Chin and his company following an ongoing legal dispute regarding the unapproved sale of a whopping $2.6 million in crypto asset securities. Who knew going against the SEC was the cryptocurrency equivalent of challenging a bear to a wrestling match?
What Happened? A Timeline of the Events
Let’s rewind the tape. On December 21, 2022, the SEC filed a complaint, alleging that between March and May 2018, Chin and his team managed to raise $2.6 million from around 1,600 investors, all geared towards developing a software platform. Spoiler alert: They also sold Thor tokens without the crucial SEC registration. Talk about skipping a step in your business plan!
The Default Judgment Explained
Fast forward to October 18, 2023. The U.S. District Court for the Northern District of California dropped the gavel on the case. A default judgment means that Chin and Thor didn’t respond appropriately to the SEC’s lawsuit, rather like showing up to a dance contest only to stand frozen on stage while the music plays.
SEC’s Accusations
One major enforcement issue raised by the SEC is the allegation that Chin and Thor failed to meet the standards required for selling unregistered securities. They were selling Thor tokens like hotcakes without the proper clearance. Not to mention, the SEC claimed that they provided erroneous info to their investors about the project’s real progress and partnerships. It turns out, telling your investors they’ll profit while sneaking some cash into your personal account isn’t exactly in the playbook for a successful startup.
Consequences and Payments
As a result of their misdeeds (or perhaps miscalculations), Chin and Thor are now on the hook for paying over $903,000. This includes nearly $744,555 in disgorgement—basically, giving back what you shouldn’t have taken—and an additional $158,638.06 in prejudgment interest. That’s a hefty price to pay for having a major case of regulatory amnesia!
Future Implications for Chin and Thor
Along with the financial penalty, Chin and Thor Technologies have been hit with permanent injunctions, which means they’re off the dance floor when it comes to future crypto asset securities offerings. However, in a little twist, Chin is still allowed to play with securities through his personal account. I guess even in legal limbo, there’s still a sliver of freedom!
Final Thoughts
This legal escapade serves as a timely reminder for other crypto ventures: always read the fine print and make sure that your securities are registered. And if you think you can go rogue, well, that’s like trying to tame a wild bull in a rodeo—more often than not, it ends poorly.
