Enigma Protocol abandons Ethereum – Reaches agreement with SEC

  • The US Securities and Exchange Commission agrees with Enigma to return $45 million from an ICO on the basis of its ENG token, based on Ethereum.
  • Enigma replaces Ethereum and launches its mainnet on the Cosmos blockchain and releases a new token called “Secret” (SCRT).

The United States Securities and Exchange Commission (SEC) issued a press release announcing the agreement reached with Enigma. The start-up was accused of raising funds through an unregistered Initial Coin Offering on the Ethereum-based token, ENG. Enigma was able to raise $45 million which is to be returned to its investors.

In the agreement, Enigma agrees to pay a $500,000 penalty, to allow its investors to receive compensation for their participation in the ICO, and to make periodic reports to the SEC. Investors will be compensated through a claims process. Finally, the Enigma token (ENG) will be registered as securities.

John Dugan, Deputy Director of Enforcement at SEC, said that investors have a right to receive information about ICOs and the companies that issue them. Dugan said this applies to all assets, traditional or newer ones such as cryptocurrencies. Therefore, Enigma failed to register the ICO and not disclose this fact to its investors. Dugan added:

The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.

Enigma, according to the SEC, pledged to comply with the order without confirming or denying the allegations. The start-up said the SEC agreement will allow them to focus on developing Enigma and its privacy solutions. Enigma also seeks to encourage the adoption and use of decentralized technology. The start-up will continue to update the community on the progress of the agreement in the near future:

We are thrilled to have the opportunity to put this process in the rearview mirror and turn back to our development work with our full attention and energy.

Transition from Ethereum to Cosmos

On the other hand, Enigma made an update on the launch of its Cosmos-based mainnet. According to the update, the start-up successfully launched its first Enigma mainnet that is operated by 20 independent validators. The validators are part of the Enigma community.

Enigma’s mainnent is a Proof-of-Stake blockchain based on the Cosmos SDK/Tendermint. In addition, Enigma’s mainnent will have a new native token called Secret (SCRT). The token will be used for online transaction fees and for staking:

This new chain serves as the consensus layer for the Enigma network, replacing Ethereum.

Enigma revealed that the launch of the mainnet has enabled validator-approved changes to be made to its governance, delegation, inflation and slashing. The approved changes will increase the level of decentralization of the new mainnet which has been left, according to Enigma, totally under the operation of the validators.

Follow us on Facebook and Twitter and don’t miss any hot news anymore! Do you like our price indices?

Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.

About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

Comments are closed.