The Philippines Exchange and Securities Commission (SEC) has moved to halt the initial coin offering of KropCoin, a new crypto that was styled as a first in agricultural cryptocurrency. The order was filed on the 9th January, 2018 and then posted on the SEC website on the 26th January, 2018.
KropCoin has been highly marketed on major crypto platforms. According to the developers, 2 million of the 6.4 million tokens produced have already been sold, with each token going for $0.70.
Breaching Securities Registration Regulations
The SEC is not mandated to regulate cryptocurrencies and ICOs – at least not yet. Nevertheless, it explained that KropCoin was regarded as a security, and as such it had to follow the due registration and regulation process before the launch of the ICO.
The SEC said that it had conducted comprehensive investigations that revealed that the coin was being sold in the Philippines illegally, without the necessary license or documentation.
More Trouble for Founder Joseph Calata
KropCoin tokens are relatively new in the industry, but they supposedly have the backing of four companies: Black Sands Capital, Inc., Black Cell Technology, Inc., Black Cell Technology Limited, and Krops. According to investigations by the SEC, all of the four companies are registered to Joseph Calata, a prominent businessman and citizen of the Philippines.
Joseph Calata has been under fire from the SEC recently because of suspicious activities. He was recently banned from being a Director or officer of any listed companies. Additionally, the Calata Corporation was delisted from the exchange because of the failure to disclose all the necessary material information. To this end, some speculative investors are of the opinion that KropCoin is nothing but a means for Calata to prop up his businesses.
In fact, there have been rumors that Calata plans to convert shares of the Calata Corporation to the KropCoin cryptocurrency in a bid to hold on.
Chance to Appeal
The cease-and-desist order filed by the SEC prohibits the four companies, as well as their directors and agents, from engaging in any online activities related to KropCoin tokens. It has also banned the sale of the coin in the Philippines. In the meantime, the SEC is putting together a case and plans to take the proper criminal and administrative action against the companies as well as everyone involved in the sale of KropCoin.
However, the four companies still have a period of five days to appeal the SEC’s order – an appeal should be heard within 15 days after filing. If they do so, the SEC will be required to either resolve or reject the appeal within ten days. If all goes well, then KropCoin may be registered and licensed for sale in the Philippines.
Do you think that KropCoin is legitimate or do you share the opinion that it is just a prop for the Calata Corporation? Would you invest in KropCoin if it was licensed? Share your thoughts with us in the comments below!