Thor Technologies founder David Chin, has lost a legal battle with the U.S. Securities and Exchange Commission (SEC) over the unauthorized transfer of $2.6 million of crypto asset securities.
According to the 21 December 2022 SEC complaint, Chin and Thor Technologies raised $2.6 million from 1,600 investors between March and May 2018. The sale of its Thor (THOR) coin generated the funds. Notably, roughly 200 of these investors were from the United States.
These tokens were supposed to be utilized on a software platform connecting gig economy workers and corporations, but the project has yet to materialize.
The SEC alleged that Chin and Thor violated federal securities laws by offering and selling unregistered Thor Tokens without meeting the requirements for an exemption.
In addition, the SEC alleged that both Chin and Thor made false and misleading statements regarding the project’s development, partnerships, and investor returns.
In April 2019, after announcing that regulatory issues compelled them to cease operations, Chin pledged investors’ repayment while developing a plan.
Despite Chin’s assurance, the SEC discovered that he did not return any funds to investors and instead deposited some proceeds into his bank account.
The Court’s Decision
When Chin and Thor failed to respond to the SEC’s complaint or to appear in court, the court granted the SEC’s motion for default judgment. In addition, they were ordered to pay a total of $903,193.06, which consists of disgorgement of $744,555 and prejudgment interest of $158,638.06, which represents the amount they raised from investors minus the amount they returned.
In addition, the court issued permanent injunctions prohibiting Chin and Thor from participating in future offerings of crypto asset securities. However, it is essential to observe that Chin may still buy and sell securities for his account.
Despite this exception, the SEC warned that it will continue to monitor the cryptocurrency landscape and prosecute those who violate securities laws.
