Thor Technologies and its founder and former CEO, David Chin, have faced a significant legal setback in an ongoing dispute with the United States Securities and Exchange Commission (SEC). The dispute revolves around the unapproved sale of $2.6 million in crypto asset securities.
Default Judgment Issued by U.S. District Court
The SEC announced a victory on the 19th of October after a default judgment was issued against Chin and Thor by the U.S. District Court for the Northern District of California, San Francisco, on Wednesday, October 18. A default judgment is a legal ruling issued by a court when one party fails to respond or defend their case within the specified legal time frame
Chin and Thor Technologies raised $2.6 million from approximately 1,600 investors between March and May 2018. This is as per the SEC’s complaint filed on December 21, 2022. Moreover, this funding was intended for a software platform targeting gig economy workers and companies.
The SEC contends that the offers and sales of Thor tokens were not registered with the SEC. Also, they were promoted as investment opportunities.
Deceptive Practices and Regulatory Obstacles
The SEC further claimed that Chin and Thor provided investors with inaccurate and deceptive information concerning the project’s advancements, collaborations, and income.
Despite announcing a halt in operations in April 2019 due to regulatory obstacles, Chin assured investors of repayment while devising a strategy. However, the SEC found that he did not reimburse any funds to investors. Instead, they redirected some earnings into his personal bank account.
Judgment, Penalties and Permanent Injunctions
In response to the legal proceedings, Chin and Thor have been instructed to pay a sum of $903,193.06. This includes disgorgement of $744,555 and prejudgment interest amounting to $158,638.06. This reflects the total funds gathered from investors minus the amount repaid.
Additionally, permanent injunctions have been enforced against Chin and Thor. This will prevent their involvement in any future offerings of crypto asset securities. It’s important to note that Chin is still free to buy or sell securities from his personal account.