The protostarr project was to make it possible to pay content providers by their fans on YouTube, Twitch and on other platforms of video and streaming live. The Whitepaper explained:
"Protostar is the new evolution of the world of investment in digital media. Our ambition is to change the existing model that is based on donors, to make investors through smarts contracts. "
The ICO took place in August and allowed the team to harvest 119.6 Ether. Due to pressure from the SEC, their plans are suspended and they begin to repay investors. Their official website https://protostarr.io/ is also down:
- Protostar's press release
"On August 24, 2017, we were contacted by the SEC regarding the Protostarr ICO. It aimed to finance the development of our decentralized Ethereum application. After consulting several lawyers, we decided to end the ICO which began on August 13, 2017 and to repay the investors.
Like many of our supporters, we were delighted to be an innovative force in the emerging area of content creation and funding. Unfortunately, as a stratup, we do not have the resources to develop our DApp and challenge the SEC's decision on our ICO and its interpretation under US securities law.
People who have sent Ethereum to the crowdsale payment address will receive a refund at the address of the original portfolio. These original portfolio addresses are verifiable on the Ethereum block string that is attached to the ICO contract:
https://etherscan.io/address/0xEa16ebd8Cdf5A51fa0a80bFA5665146b2AB82210#internaltx
- the refunds will start on 2 September 2017.
For immediate inquiries regarding the reimbursement of payments, please contact info@protostarr.io. "
- The SEC, the ICO, and ... Protostarr
Although the regulations remain unclear, in July the SEC issued its first official public statement on tokens: a report on the notorious "CAD" - The DAO was a decentralized investment fund that suffered a bug in programming one of their smarts contracts. The report determined that the DAO's tokens were securities and confirmed what many insiders thought likely. Certain tokens are considered by the SEC to be securities and must therefore be approved in advance by the US authority. Another crypto project, Harbor, was abandoned following the publication of the report.
After the SEC appeal, Gilson called specialist lawyers in the Washington, DC area, but no one knew if his token would be considered a security. The SEC's small business office was not able to give Protostarr a definitive answer, but advised the team to follow the most conservative route and pay back its investors.
Despite the sabotage of the SEC, Gilson, who previously worked in cybersecurity for the defense ministry and who has been involved in Bitcoin since 2012, intends to turn the page and move on to another project.
At present, many other ICOs are in the regulatory "gray zone". They are in complete uncertainty as to whether their project is subject to securities regulation or not. The SEC had not applied it so far, but now it appears that it has accelerated its regulatory efforts.
In the newspaper we wonder. Protostar had raised "only" 119.5 Ethers, a ridiculously low amount compared to other projects that financed themselves through an ICO. What has crossed the minds of the SEC?
- Please upvote if you liked the post, follow to stay up to date with my posts, and leave a comment to let me know what you think!