SEC Wins Legal Battle Against ThorChain ($Thor) and David Chin
The SEC secures a default victory over Thor Token Company and its founder, David Chin, due to their lack of response or action in court proceedings.
In a recent legal development, the U.S. Securities and Exchange Commission (SEC) secured a default judgment against Thor Technologies and its founder, David Chin, over allegations of an unregistered $2.6 million crypto asset securities offering. This ruling by a San Francisco district court reflects the consequences when defendants neglect legal obligations, such as attending trials or adhering to documentation deadlines.
In late December 2022, the SEC initiated legal proceedings against Thor Technologies. The crux of the issue lay in the fact that Thor and its founder, David Chin, had been selling “Thor Tokens” as a means to finance a software platform for gig economy entities. By April 2019, Thor had already announced the closure of its operations, citing an array of regulatory hurdles as the primary reason.
Implications of the Judgment
As a result of the default judgment – which, as a reminder, typically ensues when a party fails to uphold specific legal actions – Thor and Chin face significant repercussions. The court has imposed a ban on both entities, prohibiting their involvement in any future crypto asset securities offerings.
Moreover, the court mandated a financial penalty, requiring a disgorgement of $744,555, along with a prejudgment interest amounting to $158,638.06.
However, it’s noteworthy that this ruling does not completely ostracize Chin from the world of securities. He retains the right to trade securities, including those of the crypto-asset variety, but only for his personal account.
The SEC’s victory serves as a potent reminder of the importance of adhering to regulatory guidelines, particularly in the swiftly evolving realm of cryptocurrency. While the world of digital assets offers immense potential, it also demands vigilance and compliance.
This case highlights that startups and investors should navigate the crypto landscape cautiously and follow all legal protocols to prevent severe penalties.
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