b'SEC SETTLEMENTS AND ENFORCEMENT ACTIONSIn the Matter of Enigma MPC, Securities ActThe SEC also alleged that, to raise money to fund Release No. 10755 (Feb. 19, 2020) the Enigma Protocol, Catalyst, and the Enigma On February 19, 2020, the SEC issued an orderDataMarketplace, Enigma conducted an ICO of instituting cease-and-desist proceedings pursuant todigital assets called ENG Tokens between June and Section 8A of the Securities Act of 1933, making findings,September 2017. That ICO consisted of a pre-sale to and imposing penalties and a cease-and-desist orderaccredited investors of ENG Tokens in exchange for U.S. with respect to Enigma MPC (Enigma) in connectiondollars, Bitcoin, or Ether through Simple Agreements with what the SEC alleged to be an ICO conductedfor Future Tokens (SAFTs) and a one-day crowdsale in violation of Sections 5(a) and 5(c) of the Securitiesfor the general public. During the ICO, Enigma raised Act. The SEC required Enigma to (1) cease and desistproceeds worth approximately US $45 million by selling from committing any future violations of Sections 5(a)75 million tokens to almost 6,000 people.and (c) of the Securities Act; (2) register ENG Tokens asIn addition, the SEC alleged that Enigma promoted the securities with the SEC; (3) institute a claims process toICO by highlighting the expertise of its founders and refund investors for the purchase of ENG Tokens in theadvisors, paying promoters and others to tout Enigma ICO and file periodic reports with the SEC concerningas a good investment opportunity through (among other the claims process; and (4) pay a $500,000 monetarythings) a bounty campaign that offered ENG Tokens in penalty. The order was part of a settlement betweenexchange for promoting the ICO and Enigmas products, Enigma and the SEC to which Enigma consented withoutand seeking to generate interest in ENG Tokens through admitting or denying the SECs findings. its efforts to have the tokens traded on secondary Enigma is a data encryption startup based in San Francisco, California, and Israel. Founded in 2015, Enigma initially developed technology, which it called the Enigma Protocol, to facilitate the sharing andThe SEC required Enigma to (1) cease and analysis of encrypted data without decrypting itdesist from committing any future violations primarily for use in the healthcare and finance industriesof Sections 5(a) and (c) of the Securities Act; as a secure means to share data across data silos. (2) register ENG Tokens as securities with the The SEC alleged that, beginning in late May 2017,SEC; (3) institute a claims process to refund Enigma began to shift its business model andinvestors for the purchase of ENG Tokens announced that it planned to use the Enigma Protocolin the ICO and file periodic reports with the to develop (1) a platform for digital asset traders toSEC concerning the claims process; and test trading strategies (Catalyst) and (2) a data(4) pay a $500,000 monetary penalty. marketplace to buy and sell market data sets relating to digital assets (Enigma DataMarketplace). 11'