Sia Network’s Creator, Nebulous, Settles With SEC For $225k; Like Block.One’s EOS, No Fault Admitted
Boston based Nebulous who created a Sia network, a decentralized cloud-based data storage network has reached a settlement with the Security and Exchange Commission(SEC), over unregulated securities offerings and conversion rates.
The settlement was regarding an unregistered security offering called Sianotes dating back to May 2014 and its conversion to Siafunds in June 2015. The blog post regarding the settlement with SEC also mentioned that SEC won't be taking any enforcement action against Siacoin token or any other activity of the current Sia network.
The settlement deal did not even require Nebulous to register its Siacoin token as a security with the SEC. The Nebulous settlement comes a day after Block. One's $24 million with the SEC for their EOS maker's $4.1 billion security sale. Zach Herbert, Chief Operating Office of Nebulous said,
“Though the penalty for our unregistered 2014 Siafunds offering is steep, we are excited that the SEC chose to take no action against Siacoins, and we believe this settlement validates our two-token model.”
The Nebulous sia network has 323 hosts in 43 countries used by people to store their file contracts with over 500 terabytes of data under its belt.
The Security Offering that led to the settlement
Back in May 2014, the Siastock offering promised “a guaranteed income proportional to the value of storage being rented from the Sia network.” After two days of Siastock offering, the firm started selling sianotes which they promised would be convertible to Siastock upon the launch of the Sia network. Nebulous sold 1250 Sianotes for $96 every three months before the ethereum offering.
SEC claimed that Nebulous failed to register both its Sianotes and Siastock as security. At that time Nebulous released a statement,
“During these earliest stages of development of blockchain technologies, the Nebulous team did not anticipate that the SEC might later deem Sianotes or any other blockchain assets to be securities.”
The firm began converting Sianotes to Siastock in April 2015 and by June almost 1189 Sianotes were converted back to Siafunds which were held by 46 investors. However, 61 notes went unaccounted as Nebulous did not have the account for their owners, claimed SEC.