Blockchain-Based Healthcare Firm Achieves Settlement with SEC Over Unregistered ICO
According to the latest reports, the SEC, short for the Securities and Exchange Commission, has settled the charges with SimplyVital Health, Inc. The Commission had pressed an Administrative Proceeding against the company offering blockchain-based solutions for the healthcare industry in the previous week for the firm’s unregistered Initial Coin Offering during 2017-2018. As per the SEC, the blockchain firm based in New England had offered and sold securities worth about 6.3 million dollars to the public in unregistered transactions.
SimplyVital Health had revealed its plan of conducting a token sale during late 2017 for raising money for the advancement of its Health Nexus development. Health Nexus is a blockchain ecosystem related to healthcare. For this, the company also offered HLTH (Health Cash), a token that would be utilized as a currency in their Health Nexus. At the time, SimplyVital Health had also announced of conducting HLTH tokens’ pre-sale in which investors were to be offered SAFTs (Simple Agreements for Future Tokens), under which the company sold the HLTH tokens which wouldn’t be distributed to the investors until and unless SimplyVital created it.
As noted in the order by the SEC, SimplyVital Health neither filed a statement for registration with the SEC nor qualified for exclusion from registration before selling and offering HLTH tokens to people through its SAFTs. The SEC’s order also reveals that SimplyVital raised about 6.3 million dollars through its unregistered securities sale from September 2017 through April 2018.
However, after the company conducted the presale in April last year, it eventually decided against offering or selling HLTH tokens through its scheduled Initial Coin Offering (ICO). Not just that, the company also went on to voluntarily return all the funds it had raised through the pre-sale substantially to the investors. This step from the company might be the reason why the SEC has not imposed any civil penalty on the blockchain firm.
The SEC had found SimplyVital to have infringed Section 5 (a) as well as (c) of the registration provisions, 1933’s Securities Act. The company, in its response, did not deny or admit to these findings and accepted the cease-and-desist order.
This settlement with the Commission now facilitates the management to again focus on building value-based healthcare-related programs and solutions based on the blockchain technology. The CEO of the company, Kat Kuzmeskas, said in a statement that they are glad to have put this incident behind them and are concentrating on the next steps to be taken in the firm’s evolution. The CEO also shared that they have unveiled “Sana” services recently that enables physicians taking part in the Centers for Medicaid and Medicare Services’ value-based care programs to offer enhanced care while cutting down the financial penalties.
