Thor Technologies and its founder, David Chin, have encountered a significant legal setback in an ongoing dispute with the United States Securities and Exchange Commission (SEC) concerning the unapproved sale of $2.6 million in cryptocurrency securities.
On October 19th, the SEC announced a victory in the case, as a default judgment was issued against Chin and Thor by the U.S. District Court for the Northern District of California, San Francisco, on October 18th.
A default judgment is issued by a court when one party in a lawsuit fails to respond or defend their case within the legal timeframe.
This typically happens when the defendant doesn’t file a response to the plaintiff’s complaint or fails to appear in court as required.
According to the SEC’s complaint filed on December 21, 2022, Chin and Thor Technologies raised $2.6 million from around 1,600 investors between March and May 2018.
This capital was intended for a software platform targeting gig economy workers and companies.
The SEC’s argument is that the sale of Thor tokens was not registered with the SEC and was promoted as investment opportunities.
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These funds were generated by selling the Thor (THOR) cryptocurrency, with approximately 200 investors in the United States.
The SEC accused Chin and Thor of violating federal securities laws by issuing and selling unregistered Thor tokens without meeting the necessary exemption requirements.
Moreover, the SEC alleged that Chin and Thor provided investors with false and misleading information about the project’s progress, collaborations, and earnings.
Despite Chin’s commitment to repay investors after halting operations in April 2019 due to regulatory issues, the SEC found no reimbursements to investors. Instead, some earnings were redirected into Chin’s personal bank account.
As part of the judgment, Chin and Thor have been ordered to pay a total of $903,193.06, which includes disgorgement of $744,555 and prejudgment interest of $158,638.06.
This amount reflects the total funds raised from investors minus any repayments made.
Additionally, permanent injunctions have been imposed on Chin and Thor, prohibiting their involvement in future offerings of cryptocurrency securities.
However, Chin is still permitted to buy or sell securities from his personal account.
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