Thor Technologies, under the leadership of its founder David Chin, has faced a legal setback in an ongoing dispute with the U.S. Securities and Exchange Commission (SEC) over the unapproved sale of $2.6M in crypto asset securities.
The SEC on Oct. 19 announced their victory after a default judgment was issued against Chin and Thor by a San Francisco district court on Wednesday, Oct.18. A default judgment is a legal ruling issued by a court when one party in a lawsuit fails to respond or defend their case within the specified legal time frame. This typically occurs when the defendant does not file an answer to the plaintiff's complaint or does not appear in court as required.
As per the complaint filed by the SEC on Dec. 21, 2022, Chin and Thor Technologies raised $2.6 million from approximately 1,600 investors between March and May 2018. This funding was intended for a software platform aimed at gig economy workers and companies. The SEC's contention is that the offers and sales of Thor Tokens were not registered with the SEC and were promoted as investment opportunities.
These funds were generated through the sale of the Thor (THOR) coin, with about 200 of these investors residing in the United States. The SEC accused Chin and Thor of violating federal securities laws by issuing and vending unregistered Thor Tokens without meeting the requirements for an exemption.
Furthermore, the SEC asserted that both Chin and Thor provided investors with inaccurate and deceptive information concerning the project's advancements, collaborations and income. In April 2019, following their announcement of halting operations due to regulatory obstacles, Chin assured investors of repayment while devising a strategy. Despite this commitment by Chin, the SEC found that he did not reimburse any funds to investors but instead redirected some earnings into his personal bank account.
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As part of the judgment, they have been instructed to pay a sum of $903,193.06, which encompasses a disgorgement of $744,555 and prejudgment interest amounting to $158,638.06. This reflects the total funds they gathered from investors minus the amount they repaid.
Additionally, permanent injunctions have been enforced against Chin and Thor, preventing their involvement in any future offerings of crypto asset securities. Notably, Chin retains the freedom to buy or sell securities for his personal account.
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