SEC Revokes License of ParagonCoin Crypto Startup
Luisa Crawford Mar 11, 2023 10:44
ParagonCoin, a crypto startup backed by rapper The Game, had its license revoked by the SEC for violating securities laws by failing to file periodic reports. The startup had held a $70 million initial coin offering in 2017, and in 2021, was found liable for more than $12 million in a class-action lawsuit. Meanwhile, other rappers like Snoop Dogg and Eminem are entering the Web3 space with NFTs and new startups.
ParagonCoin Limited, a crypto startup focusing on the marijuana industry, has had its registration revoked by the United States Securities and Exchange Commission (SEC) for violating securities laws after failing to file periodic reports. The SEC started proceedings against the firm in February 2022 and pointed out that its last filing was from March 2019, which states that it lost over $10 million in 2018.
The SEC confirmed its allegations against ParagonCoin and found that the firm is in default. The crypto company ignored a delinquency letter sent by an SEC division about the periodic reports. In addition, the SEC also pointed out that the startup did not respond to its order initiating proceedings in February 2022, and did not answer five months later to provide reasons why it should not be found in default.
ParagonCoin had held a $70 million initial coin offering (ICO) in 2017, with backing from American rapper Jayceon Terrell Taylor, better known as “The Game.” However, in 2021, Taylor and the crypto startup’s executives were found to be jointly liable for more than $12 million in a class-action lawsuit. The lawsuit alleged that the startup violated securities law when it held its ICO.
While ParagonCoin has been facing legal challenges, other rappers are entering the Web3 space with new startups and NFTs. The Game's fellow rapper Snoop Dogg and Eminem recently featured their Bored Ape Yacht Club NFTs in a music video for their song "From The D 2 The LBC" in June 2022. The video occasionally showed both rappers as their animated Bored-Ape-style characters.
Meanwhile, The Game has not been successful in the crypto world, but he has announced partnerships within the Web3 space and has recently been revealed as the co-founder of a Web3-powered live-streaming platform called Shiller. The platform aims to give artists more control over their content and income, with features such as pay-per-view and subscription models.
In conclusion, ParagonCoin's license revocation by the SEC highlights the need for crypto startups to comply with securities laws and regulations. On the other hand, the entry of rappers like Snoop Dogg, Eminem, and The Game into the Web3 space shows the growing interest of the music industry in crypto and NFTs.
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