In an ongoing dispute with the U.S. Securities and Exchange Commission (SEC) concerning the unauthorized sale of $2.6 million in crypto-asset securities, Thor Technologies and its founder and former CEO, David Chin, have encountered a legal setback. The SEC claimed victory on October 19, as the U.S. District Court for the Northern District of California in San Francisco entered a default judgment against Chin and Thor on October 18. A default judgment is a legal ruling issued when one party to a lawsuit fails to respond or does not meet the statutory response deadline, typically occurring when the defendant fails to address the plaintiff's complaint or attend court as required.
The SEC filed a complaint on December 21, 2022, stating that Chin and Thor Technologies had raised $2.6 million from approximately 1,600 investors between March and May 2018. These funds were intended for software platforms aimed at gig economy workers and companies. The SEC's assertion is that the offering and sale of Thor tokens were not registered with the SEC but were marketed as investment opportunities. The SEC charged Chin and Thor with violating federal securities laws by issuing and selling unregistered Thor tokens without meeting exemption requirements.
The SEC further accused Chin and Thor of providing investors with misleading and inaccurate information regarding project progress, partnerships, and earnings. In April 2019, after announcing the cessation of operations due to regulatory obstacles, Chin had reassured investors about repayment while formulating a strategy. However, the SEC found that he failed to refund any funds to investors and had instead transferred some of the proceeds to his personal bank account. As part of the judgment, Chin and Thor were ordered to pay $903,193.06, comprising $744,555 in disgorgement and $158,638.06 in prejudgment interest. This sum reflects the total amount raised from investors minus the amount repaid.
Moreover, Chin and Thor were subjected to a permanent ban, preventing their participation in any future crypto-asset securities offerings. However, the prohibition does not extend to Chin's ability to purchase or sell securities from his personal account.
