MANILA, Philippines – The Securities and Exchange Commission (SEC) has rejected with certainty the filed proposal by Krops to revoke the suspension and desist order released in opposition to the initial coin offering of Krops.
During the disclosure of the decision last week, the SEC en banc mentioned that Krops’ ICO had fulfilled all the requirements in the Howey Test, a US adopted test utilized to determine if a particular transaction entailed securities, hence, should be controlled.
Krops is a mobile software launched by the entrepreneur Joseph Calata, which was developed to bring buyers and sellers of agricultural goods together. It started last year with an initial coin offering to collect funds for the application’s international expansion.
The Securities and Exchange Commission, however, released a Cease and Desist Order on the ICO, for the reason that the offering composed of securities, thus hence, must have been recorded with the SEC.
Black Cell Technology, the company supporting Krops, applied for a motion to revoke the CDO.
Calata was saddened by the release of the CDO. He noted that the order prevented Filipinos from taking part in what he described as a major improvement in the industry of agriculture.
Calata said in a letter he wrote to the ICO players that he wants Filipinos to continually be involved in the major development in the field of agriculture. He expressed that the cease and desist order issued against the offering saddened him and that the Philippine Security and Exchange Commission is currently on the move to unduly control the global initial coin offering of Krops.
He also explained that the CDO was simply an edict to cease the KropCoins selling to Filipino nationals only and that the commission cannot forbid international selling since it’s not under the SEC’s jurisdiction. Also, the order is not to cease Krops’ software operation which performs as a virtual day-to-day agricultural market site of sellers and buyers of agricultural goods.
Black Cell Tech. submitted an appeal to revoke the order, it was denied, however, by the SEC.
SEC explained that KropCoins are not registered securities which are being sold and offered in the country via joint respondent efforts.
Respondents claim that KropCoins doesn’t meet the Howey Test’s fourth element, that is the value increase mainly from other’s efforts.
However, in its decision, the Securities and Exchange Commission said that KropCoins would have a value increase if the core of the agriculture does well because of the Black Cell HK efforts, as well as the efforts made by the market players. It was admitted by the respondents during the time they said that forces of the market which control the commodity values that’s being traded through the Krops platform might as well impose the KropCoins value.
As per SEC, since cryptocurrencies involve investment contracts wherein an individual invests money thus caused to expect returns, it is, therefore, determined as securities.