The U.S. Securities and Exchange Commission announced Monday (Dec. 11) that Munchee, the California food review service, has halted its initial coin offering after being contacted by the government agency.
According to a press release, Munchee agreed to an SEC order in which it found the company’s ICO constitutes unregistered securities offers and sales. The ICO was halted before any tokens were given to investors, and the SEC said Munchee refunded investor proceeds.
Munchee was looking to raise $15 million to improve an iPhone app that is focused on restaurant meal reviews and create an environment in which Munchee and others would use tokens to buy goods and services. The SEC said that in the course of its ICO, the company and other promoters told investors that Munchee’s efforts would result in an increase in the value of the tokens and that it would take steps to create and support a secondary market for the tokens.
“We will continue to scrutinize the market vigilantly for improper offerings that seek to sell securities to the general public without the required registration or exemption,” said Stephanie Avakian, co-director of the SEC’s Enforcement Division. “In deciding not to impose a penalty, the Commission recognized that the company stopped the ICO quickly, immediately returned the proceeds before issuing tokens and cooperated with the investigation.”
The SEC said Munchee consented to the SEC’s cease-and-desist order without admitting or denying the findings. The order comes from the SEC’s new Cyber unit, which is focused on finding any misconduct related to blockchain and ICOs, the spread of false information online and via social media, brokerage account takeovers, hacks of non-public information and other threats against trading platforms.