Blockchain startup Enigma has reached a settlement with the U.S. Securities and Exchange Commission (SEC) over the initial coin offering conducted in 2017 which brought the company $ 45 million. The aforementioned ICO was qualified as an illegal distribution of securities. Enigma “consented to the order without admitting or denying its findings”. Enigma also accepted a $500,000 penalty and agreed to a claims process that lets investors who participated in the ICO reclaim their funds, said in the SEC statement.

“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones,” said John T. Dugan, Associate Director for Enforcement in the SEC’s Boston Regional Office. “The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”

Enigma will have to register their coins as securities and periodically submit reports to the SEC.

On February 13, the Enigma project launched the main network based on the Cosmos SDK / Tendermint PoS technology.

Enigma further reported on Wednesday that its mainnet has been launched, with more than 20 validators currently operating on the network.

“This settlement, which is the culmination of an extended series of discussions with the SEC, clears the way for our development team to return its full attention and energy to our original and continued vision: building groundbreaking privacy solutions that improve the adoption and usability of decentralized technologies, for the benefit of all,” Enigma said in a statement. “With the settlement behind us, we can again push forward and meaningfully advance the Enigma protocol – as evidenced by today’s news of the successful launch of the first Enigma mainnet.”

At the beginning of the year, the SEC warned about the risks of investing in Initial Exchange Offerings (IEO).