Esports betting platform Unikrn will continue to operate despite a $6.1 million settlement imposed by the US Securities and Exchange Commission (SEC) this week.
The deal settles the SEC’s complaint that Unirkn was selling unregistered securities via its initial coin offering (ICO) in 2017. Investors bought the coin, UnikoinGold (UKG) in the hope they would increase in value and could be used on the Unirkn esports betting platform.
However, the SEC argued the investment was more akin to buying a share of company stock, meaning Unikrn was in violation of IPO regulations.
Where will Unikrn settlement go?
The $6.1 million will go to repaying UKG investors, with the process overseen by the SEC. But while UKG investors will be reimbursed, Unikrn raised $31 million in total over several funding rounds, meaning many early investors will not be made whole.
In a dissent letter, SEC Commissioner Hester Peirce said she disagreed with her colleagues’ decision. Peirce, known as a crypto supporter, said the crackdown would stifle innovation.
She argued the settlement marked “substantially all Unikrn’s assets,” and “effectively forces Unikrn to cease operations.”
“By failing to challenge ourselves to experiment with new approaches to regulation, we, and those whose interests we are pledged to serve, risk surrendering the fruits of innovation,” Peirce said.
However, Unikrn CEO Rahul Sood said the company would continue in earnest.
“We spent months working with the SEC to come to a solution that was about moving the business forward,” the company said in a statement. “The common ground we found requires Unikrn to completely stop supporting UKG and help provide a fund for purchasers of UnikoinGold.
“This gives us clearance to focus on continuing to build our industry-leading business.”
While the firm must stop using the UKG system for payments, it pledged to continue innovating on payments and on the blockchain. Sood said previously the firm is looking at ways of partnering with US sports betting operators.
The firm is currently licensed by the Isle of Man.