Sia Reaches $225K SEC Settlement Over $120K Unregistered Token Sale

Boston-based Nebulous, makers of the Sia network for decentralized data storage, has settled with the U.S. Securities and Exchange Commission over an unregistered securities offering and conversion scheme.

In a blog post Tuesday, the company announced the settlement without admitting fault.

The Sia settlement comes just a day after the announcement of Block.

One's $24 million settlement with the SEC for the EOS maker's $4.1 billion securities sale.

As part of the Nebulous settlement, the company will not be required to register the Siacoin utility token as a security.

"Though the penalty for our unregistered 2014 Siafunds offering is steep, we are excited that the SEC chose to take no action against Siacoins, and we believe this settlement validates our two-token model."

The company's two-token model was funded by the sale of Siastock in 2014, which the company advertised as supplying "a guaranteed income proportional to the value of storage being rented from the Sia network."

Two days after this announcement, the company began selling Sianotes that would be convertible to stock upon launch of the Sia network.

"During these earliest stages of development of blockchain technologies, the Nebulous team did not anticipate that the SEC might later deem Sianotes or any other blockchain assets to be securities."

The SEC also inquired about the unregistered 2015 conversion of "Notes" to "Stock." Ahead of Sia's platform launch, the company renamed Siastock to Siafunds, which the SEC also claims "Were" a security.