Thor Technologies and its founder and former CEO, David Chin, have faced a legal setback in an ongoing dispute with the United States Securities and Exchange Commission (SEC) over the unapproved sale of $2.6 million in crypto asset securities.
On Oct. 19, the SEC announced its victory 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, Oct.18. A default judgment is a legal ruling issued by a court when one party in a lawsuit fails to respond or defend their case within the specified legal time frame. This typically occurs when the defendant does not file an answer to the plaintiff’s complaint or appear in court as required.
As per the complaint filed by the SEC on Dec. 21, 2022, Chin and Thor Technologies raised $2.6 million from approximately 1,600 investors between March and May 2018. This funding was intended for a software platform aimed at gig economy workers and companies. The SEC’s contention is that the offers and sales of Thor tokens were not registered with the SEC and were promoted as investment opportunities.
These funds were generated by selling the Thor (THOR) cryptocurrency, with about 200 investors in the United States. The SEC accused Chin and Thor of violating federal securities laws by issuing and vending unregistered Thor tokens without meeting the requirements for an exemption.
Furthermore, the SEC claimed that Chin and Thor provided investors with inaccurate and deceptive information concerning the project’s advancements, collaborations and income. In April 2019, following its announcement to halt operations due to regulatory obstacles, Chin assured investors of repayment while devising a strategy. Despite this commitment by Chin, the SEC found that he did not reimburse any funds to investors but instead redirected some earnings into his personal bank account.
As part of the judgment, Chin and Thor have been instructed to pay a sum of $903,193.06, which 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, preventing their involvement in any future offerings of crypto asset securities. However, Chin is free to buy or sell securities from his personal account.