Ever since cryptocurrencies hit their all-time-highs, the United States SEC has been keeping a close eye on the industry. This is because the ICO boom that occurred this period got a lot of new investors into the cryptocurrency space who needed protection from scam projects. Since then, the SEC has been actively involved in the industry and has taken many steps to minimize the risks attached to cryptocurrencies and ICOs. Many projects that didn’t abide by the rules set by the commission were penalized.
Paragon Gets Cracked Down By The SEC
In November, 2018, the United States SEC announced that Paragon was under scrutiny due to some possible dishonest business practices. This led to a desist and cease order. The SEC stated that Paragon falls under the same level as securities offerings. So, not registering with the SEC was a violation of the commissions securities act. The firm had to opt for a settlement which included a $250,000 fee and the monthly submission of a report. Paragon was also ordered to compensate the investors that suffered losses. This included all the investors who bought Paragon’s token before and on the 15th of October 2017.
Paragon Proceeds To Pumping And Dumping Even After Regulatory Scrutiny
On the first of January, the entire cryptocurrency community was shocked by the significant price surge of the Paragon token. The token suddenly got a 6000% boost in price jumping from $0.165866 to $10.28 within a short period. The trading volume over a 24 hour period was $3 million while the market capitalization was $25 million.
That day, the coin’s closing value was $0.389375 indicating more than a 234% spike in price compared to the opening price. At press time, it was trading around $0.214 and the market capitalization was above $14 million. Over a seven day period, the Paragon coin was up by 107.57.
During the pump and dump scheme, traders started arbitrage trading by buying and selling cryptocurrencies on different exchanges to make quick profit. Before the pump started, YoBit with the highest trading rate announced that there was going to be a pump and dump scheme. The first pump was on PutinCoin. It spiked by more than 800% within a few minutes. After a while, the Paragon Coin spiked too.
With the SEC breathing down the neck of Paragon, one would think that the company will maintain a low profile for a while. The SEC is yet to issue any statement regarding what happened but this pump and dump can’t be good for a startup with an already fragile reputation. In the next few days, we will be able to determine if the pump and dump scheme got the attention of the SEC.