Thor Technologies, led by its founder David Chin, has suffered a legal defeat in an ongoing dispute with the U.S. Securities and Exchange Commission (SEC) regarding the unauthorized sale of $2.6M crypto asset securities. The SEC recently announced a default judgment against Chin and Thor issued by a San Francisco district court on Wednesday.
Thor Token: A Failed Project
According to the SEC’s complaint, which was filed on December 21, 2022, Chin and Thor Technologies raised $2.6 million from a diverse group of 1,600 investors between March and May 2018. The funds were generated through the sale of its Thor (THOR) coin. Notably, approximately 200 of these investors resided in the United States.
These tokens were intended for use in a software platform connecting gig economy workers and companies, but the project never materialized. The SEC alleged that Chin and Thor contravened federal securities laws by offering and selling unregistered Thor Tokens without qualifying for an exemption.
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Additionally, the SEC claimed that both Chin and Thor made false and misleading statements about the project’s progress, partnerships, and revenue to investors. In April 2019, after announcing that regulatory challenges forced them to shut down operations, Chin promised investors repayment while working out a plan.
Despite this assurance from Chin, the SEC discovered that he failed to return any funds to investors and instead diverted some earnings into his personal bank account.
The Court’s Ruling
The court approved the SEC’s motion for default judgment when Chin and Thor neglected to respond to the SEC’s complaint or appear in court. Additionally, they were ordered to pay a total of $903,193.06, which includes disgorgement of $744,555 along with prejudgment interest of $158,638.06, representing the amount they raised from investors minus the amount they returned.
The court also imposed permanent injunctions against Chin and Thor, prohibiting them from participating in any future offerings of crypto asset securities. However, it’s important to note that Chin is still permitted to buy or sell securities for his personal account.
Despite this exception, the SEC cautioned its intent to continue monitoring the cryptocurrency landscape and take action against those who infringe upon securities laws.
