UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 95965 / October 3, 2022

ADMINISTRATIVE PROCEEDING

File No. 3-18897

In the Matter of

Paragon Coin, Inc., 

Respondent.

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NOTICE OF PROPOSED PLAN OF 

DISTRIBUTION AND 

OPPORTUNITY FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and 

Exchange Commission’s (the “Commission”) Rules on Fair Fund and Disgorgement Plans (the 

“Commission’s Rules”), 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted 

to the Commission a proposed plan of distribution (the “Proposed Plan”) for the distribution of 

monies paid in the above-captioned matter.

On November 16, 2018, the Commission issued the Order instituting and simultaneously 

settling cease-and-desist proceedings against Paragon Coin, Inc. (“Paragon” or “Respondent”).1 

In the Order, the Commission found that between August 2017 and October 2017, Respondent 

offered and sold the Security to be issued on a block chain, or a distribution ledger (the 

“Offering”) to raise capital to develop and implement its business plan to add blockchain 

technology to the cannabis industry and work towards legalization of cannabis. According to the 

Order, Paragon raised approximately $12 million during the offering. The Commission found 

that Respondent violated Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) 

by offering and selling the Security without having a registration statement filed or in effect with 

the Commission or qualifying for exemption from registration with the Commission. 

In the Order, among other things, the Respondent undertook to register the Security as a 

class of securities; to distribute a notice and claim form notifying all eligible purchasers of their 

potential claims under Section 12(a) of the Securities Act, including their right to sue “to recover 

the consideration paid for such security with interest thereon, less the amount of any income 

received thereon, upon the tender of such a security, or for damages if [the purchaser] no longer 

owns the security” and informing such purchasers that they may submit a written claim directly 

to the Respondent and that such claims must be submitted within three (3) months from the claim 

form deadline.

 

1

 Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making 

Findings, Imposing Penalties and a Cease-and-Desist Order, Securities Act Rel. No. 10574 (Nov. 16, 2018). 
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In anticipation of Respondent’s compliance with the undertakings set forth in the Order, 

it was determined no further funds would be needed to fully compensate the harmed investors. 

Therefore, the $250,000 civil money penalty that the Commission imposed was ordered to be 

paid to the Commission for transfer to the general fund of the U.S. Treasury, pursuant to the 

payment plan detailed therein. 

Respondent defaulted on its obligation to perform a respondent-administered claims 

process under the terms of the Order. Commission staff subsequently determined that it was 

feasible to distribute the $175,000 civil money penalty that was sent to the U.S. Treasury and 

recalled the funds.

On April 9, 2021, the Commission issued an order establishing the Fair Fund, pursuant 

to Section 308(a) of the Sarbanes-Oxley Act of 2002, for the $175,000 in recalled funds and any 

future funds paid by the Respondent pursuant to the Order, so the civil money penalty paid by 

Respondent can be distribute for the benefit of harmed investors.2

The Fair Fund consists of the $175,000.00 paid by the Respondent, and any additional 

monies received, pursuant to the Order, will be added to the Fair Fund. The Fair Fund has been 

deposited in an interest-bearing account at the U.S. Department of the Treasury’s Bureau of the 

Fiscal Service for investment.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of 

the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm. 

Interested persons may also obtain a written copy of the Proposed Plan by submitting a written 

request to Keshia Ellis, United States Securities and Exchange Commission, 100 F Street NE, 

Washington, DC 20549. All persons who desire to comment on the Proposed Plan may submit 

their comments, in writing, no later than thirty (30) days from the date of this Notice:

1. to the Office of the Secretary, United States Securities and Exchange Commission, 100 F 

Street, NE, Washington, DC 20549-1090;

2. by using the Commission’s Internet comment form 

(http://www.sec.gov/litigation/admin.shtml); or

3. by sending an e-mail to rule-comments@sec.gov.

Comments submitted by email or via the Commission’s website should include “Administrative 

Proceeding File No. 3-18897” in the subject line. Comments received will be publicly available. 

Persons should submit only information they wish to make publicly available.

 

2

 See Order Establishing a Fair Fund, Exchange Act Rel. No. 91522 (Apr. 9, 2021).
3

THE PROPOSED PLAN

The Net Available Fair Fund is comprised of the $175,000.00 in civil money penalties 

paid by the Respondent, and any future funds paid by the Respondent pursuant to the Order, plus 

interest and income earned thereon, less taxes, fees, and expenses. The Proposed Plan provides 

for the distribution of the Net Available Fair Fund to compensate investors for their out-ofpocket losses incurred from purchasing or acquiring “PRG Tokens,” a digital token issued by 

Respondent, between August 1, 2017 and October 23, 2017, as calculated by the methodology 

used in the plan of allocation in the Proposed Plan.

For the Commission, by the Division of Enforcement, pursuant to delegated authority.3

Vanessa A. Countryman

Secretary 

 

3

 17 C.F.R. § 200.30-4(a)(21)(iii).