US SEC charges Thor founders for selling unregistered securities in 2018

Thor Technologies, Inc., its founder, David Chin, and co-founder Matthew Moravec were charged for conducting unregistered securities offering and selling “Thor Tokens” by the Securities and Exchange Commission (SEC).

Thor’s David Chin charged

The SEC filed the complaint on Dec 21 in the U.S. District Court in San Francisco. According to the complaint, Thor and David Chin are charged with selling Thor Tokens to the public between March and May 2018 to raise capital. SEC indicates that Thor received $2.6 million coming from 1,600 investors.

Out of the 1,600 investors, 200 lived in the United States, some of whom were not accredited. The capital was to finance Thor’s business of developing a software platform called “gig economy,” targeting workers and companies, which did not materialize.

Thor and Chin promoted the Thor Tokens in the market, promising customers an increased value of the tokens and their incorporation into trading platforms. According to SEC, the company did not have a working Thor Platform that users could use to trade the tokens, and no other platform allowed trading of the tokens. SEC further alleges the defendant did not register Thor Tokens and they did not qualify to get an exemption from the regulator.

Thor not operational

In defense, Thor indicated it closed its business in 2019 after not gaining intended traction in the market and not attaining commercial success. Chin’s LinkedIn profile shows Thor Technologies engages in producing mobile apps and Odin software-as-a-service (SaaS) platforms, attributes that provide “gig economy” services.

The complaint dismissed the claim by Chin and indicated the company had not been dissolved. The business is not connected to the Thor blockchain.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, charges Thor and Chin with violating the securities registration provisions of Sections 5(a) and (c) of the Securities Act of 1933 (“Securities Act”). The SEC seeks injunctive relief, the return of allegedly ill-gotten gains plus prejudgment interest, and civil penalties.

Moravec signs a deal with SEC

In a second complaint, SEC accused Moravec of selling unregistered Thor Tokens in contravention of Sections 5(a) and (c) of the Securities Act. Acknowledging the blunder, Moravec has agreed to settle the matter with SEC.

The proposed deal comprises a prohibition from participating in any initial coin offering for three years, an ejection of $407,103 plus $72,209.45 as prejudgement interest, and a civil penalty of $95,000. The proposed settlement awaits court approval.