After reaching settlements with the Securities and Exchange Commission (SEC), two Initial Coin Offering (ICO) projects have failed to meet the initial deadline to repay investors, while a third delayed registering its tokens as securities, per a Wall Street Journal report.
Blockchain projects Airfox and Paragon, which were sued by the SEC over unregistered ICOs in late 2018, agreed at the time to settle with the regulator by compensating token investors, paying $250,000 in penalties, and registering their tokens as securities, among other things. However, the two firms have failed to meet their original deadline last month to pay back investors, according to the Journal. Airfox now said it has until Dec. 28 to repay investors, while Paragon stated that investors could submit their claims for refunds until Nov. 21.
A third firm, Gladius, settled with the SEC in Feb. 2019 under terms including that it would file with the SEC to register its tokens as securities by May 20. The company's website now states that it has been granted an extension until Nov. 18.
These companies may not have sufficient funds to repay investors if all of them claim compensation. According to a September SEC filing, Airfox had around $6.6 million in current assets by the end of Dec. 31, 2018, while it raised $15 million worth of cryptocurrencies from the ICO. Meanwhile, Paragon raised $12 million, although it had total current assets of $95,659 by the end of 2018.