Blockchain and crypto projects that raised millions of dollars via tokenized crowdfunding means are now lining up to return their capital to their original investors. Because apparently, they were not allowed to raise funds in the first place.
The Securities and Exchange Commission (SEC) has gone after these startups for reportedly violating existing securities laws. The US regulator found irregularities in the way companies raised funds, mainly by approaching average Joes instead of sophisticated, accredited investors to raise capital. As a result, the commission issued heavy penalties against the accused blockchain projects, which include the order of returning funds to the investors.