Enigma Settles with SEC and Simultaneously Launches Mainnet

Daniel Fowler
February 21, 2020

However, the launch of the Enigma mainnet guarantees that the project will survive, since once a decentralized blockchain network is launched it can not be taken down as long as nodes/validators continue securing the network.

Enigma is the latest crypto project to receive a serious enforcement action from the Securities and Exchange Commission (SEC), although the silver lining is that the Enigma mainnet has simultaneously gone live. The SEC found that the startup violated SEC regulations by offering and selling ENG Tokens as investment contracts without either registering with the SEC or receiving an exemption from registration. Enigma agreed to a claims process that would result in a return of funds to investors who purchased tokens in the ICO.

The regulator announced Wednesday that under the settlement Enigma will refund "harmed investors" using a claims process, register its tokens as securities with the SEC, file reports to the agency and pay a further $500,000 as a penalty. The crackdown is expected to continue as more evidence is gathered from companies in the wake of the 2017 ICO craze.

"The remedies in today's order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions". Enigma consented to the order without admitting or denying its findings. The start-up said the SEC agreement will allow them to focus on developing Enigma and its privacy solutions. The first mainnet is supported and operated by over 20 independent validators from the Enigma ecosystem and community. Enigma's mainnet is a proof-of-stake-based blockchain based on Cosmos SDK.

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Enigma themselves have stated that the issue being put to rest is good for them as it opens up new avenues for development.

This new chain serves as the consensus layer for the Enigma network, replacing Ethereum.

Enigma revealed that the launch of the mainnet has enabled validator-approved changes to be made to its governance, delegation, inflation and slashing.

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