Cryptocurrency advisor and blockchain speaker Nick Ayton has called out ICO-rating platform ICObench for improperly vetting a blockchain startup’s security token offering (STO). The company in question, CurveBlock, is currently rated 4.6 on ICObench’s website and promises lifetime passive income to all of its token holders.
Quoting a LinkedIn post by CurveBlock founder Gary Woodhead, Ayton claimed that the project had been poorly reviewed and did not fit the legal requirements of a financial security.
Notably, most blockchain and non-blockchain companies do not offer financial securities since the term carries a significantly greater regulatory responsibility. In the United States, for example, the Securities and Exchange Commission (SEC) closely watches token offerings and has shut down numerous ICOs for misleading or defrauding investors.
In most economies and legal jurisdictions around the world, securities can only be purchased by accredited investors. However, Ayton noted that ICObench not only offers the tokens to retail investors but also fails to provide an investment prospectus. Furthermore, the Curveblock white paper reportedly offers investors the ability to earn dividends on their initial investment. This puts it in the same ballpark as financial securities — at least in the eyes of the SEC.
Ayton further emphasized that the startup does not display any disclaimers, investor warnings, or sale agreements on its website — nor does it require investors to complete a KYC/AML check in accordance with local rules and regulation.
ICObench, meanwhile, does not offer these warnings and simply offers users the ability to participate in the token sale event.
Ayton concluded by claiming that the company intended to anonymously airdrop security tokens.
CurveBlock founder Gary Woodhead was quick to respond to the allegations. He started off by clarifying that the airdrop was intended solely for users that had complied with the company’s KYC/AML requirements. He continued to state that investors would only receive their tokens after this process — ensuring that CurveBlock was aware of each investor’s identity.
Ayton responded with a screenshot of CurveBlock’s website that openly solicited public investment in a variety of currencies — including Ethereum (ETH), British Pound, Euro, and the USD. He claimed that the page, titled Seed Round Banking, was proof of the company’s lax KYC policy.
While the debate ended without public resolution, the CurveBlock website no longer displays cryptocurrency addresses and account details. According to the project’s description on ICObench, CurveBlock is seeking approval from the SEC so that American investors can participate in the token sale.
Do you believe Nick Ayton’s assessment of Curveblock’s STO is accurate? Let us know your thoughts in the comments below!
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