SEC halts Calata cryptocurrency offer

The Securities and Exchange Commission (SEC) has issued a cease and desist order (CDO) against the initial coin offering of Krops, an agriculture mobile app founded by businessman Joseph Calata.

In an order dated Jan. 23, the SEC en banc barred Black Cell Technology Inc., Black Sands Capital Inc., Black Cell Technology Ltd. and Krops, their partners, officers, directors, agents and representatives from selling Krops tokens.

Krops is a mobile app that brings together farmers and buyers.

Based on SEC’s investigation, Krops has already sold 2.4 million tokens.

According to the SEC, Krops tokens and KropCoins are securities since these represent interests in a profit-making venture.

“What is involved here is an initial coin offering, which is essentially the same as a public offering of securities,” the SEC said.

SEC argued that Black Cell, the parent company of Krops, does not possess the requisite license to sell securities to the public.

Sought for comment, Calata said he would comply with the order and stop the sale in the Philippines but said global investors are still very much welcome.

“Krops is a company that helps farmers. I envision it to be the world’s first global digital marketplace for agriculture. This will be the Alibaba of agriculture. With $700 million worth of inventory, we are the biggest farm in the Philippines without us owning a single farm. I am saddened that the SEC has chose to slow down our endeavors and initiatives. It issued its order without due process,” he said.

Prior to the issuance of the CDO, the SEC has warned against entities selling crypto currency.

Calata said they sent a letter to the SEC seeking clarification on the matter but was surprised to suddenly receive a cease and desist order from the regulator.