- SEC has won over Thor and its founder.
- The regulator scored a default judgment against the defendants.
- Court ordered penalties and a disgorgement.
The ongoing crypto crackdown in the U.S. has seen Thor Technology and the company’s founder, David Chin, suffer a huge setback in court about a multi-million fraud allegation from a reported offering of unregistered securities.
In December 2022, the U.S. Securities and Exchange Commission (SEC) brought regulatory action against Thor and its founder, accusing the parties of contravening federal securities laws by offering and selling unregistered Thor (THOR) tokens.
Court Issues Default Judgement in Favor of SEC
On October 19, the securities watchdog announced its victory over Thor and Chin following a favorable default judgment delivered by the U.S. District Court for the Northern District of California on October 18.
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Typically, a court might issue a default judgment when the opposing party fails to defend its position as required, either by missing filing deadlines or abandoning court sessions altogether.
In the October 18 ruling, the court granted a default judgment in favor of the SEC on all the charges the regulator brought against Thor and Chin.
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Per the regulator, the two defendants marketed THOR as an investment opportunity by misrepresenting a potential increase in the token’s value, claiming it would be listed on crypto asset trading platforms.
The SEC further alleged that the defendants sold the tokens and raised $2.6 million in cash and crypto assets without prior development work on the Thor platform, leaving investors with no place to utilize Thor tokens.
According to the SEC announcement, “The court permanently enjoined Thor and Chin from violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and from participating in any crypto asset securities offering.”
Accordingly, the court has ordered Thor and Chin to each pay penalties of $150,000, while Thor will pay a disgorgement of $744,555 with prejudgment interest of $158,638.
Read how the SEC pushed LBRY to jump ship:
LBRY Inc. Bows Out of the Industry, Abandons SEC Appeal
Stay updated on why Ripple CTO seeks clarity on the SEC’s position on Ethereum:
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