Wireline Settles SAFT Suit With SEC; Peirce Partially Dissents
Wireline is now barred from distributing the tokens it promised investors in its 2018 SAFT sale.
Jan 15, 2021 at 9:45 p.m. UTCUpdated Aug 19, 2021 at 6:40 a.m. UTC
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Blockchain microservices startup Wireline will pay the U.S. Securities and Exchange Commission (SEC) $650,000 to settle charges stemming from its $16.3 million crypto token sale in late 2018.
- Wireline did not register its offering, called a simple agreement for future token (SAFT) sale, with the SEC at the time. Now, under terms of the settlement, the company is barred from giving its investors those tokens and must notify them of the fact.
- SEC prosecutors said in their filing that Wireline's SAFT was an investment contract and thus subject to agency oversight.
- Commissioner Hester Peirce, an advocate for crypto on the SEC, agreed with the SEC's action against Wireline's raise. However, she framed the settlement's mandate that Wireline's SAFT tokens not be paid out as potentially damaging to innovation in cryptocurrencies.
- "This settlement perpetuates an approach that suggests that tokens themselves are securities and thus complicates the development of crypto networks," she said in a statement.
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