SEC Settlement


In October 2019, Nebulous settled with the SEC regarding a claim related to the unregistered offering and sale of Sianotes in May 2014 and the conversion of Sianotes into Siafunds in June 2015. It's important to note that, as outlined in the settled order, the SEC did not take any enforcement action concerning the Siacoin (SC) token or any ongoing activities on the Sia network. Furthermore, the order does not require Nebulous to register the Siacoin token as a security with the SEC.

Following their investigation and as indicated in the settled order, the SEC determined that Siafunds should be classified as securities. Therefore, failing to register the 2014 offering and the 2015 conversion was deemed a violation of Section 5 of the Securities Act 1933.

Components of the Network

Two-token model

Sia uses two tokens, Siacoins and Siafunds.

We endorse Sia's two-token model, which fosters an optimal ecosystem. This system incentivizes the Sia core team and Siafund investors to prioritize product development and ensure the network's long-term, sustainable growth.

Check out our blog post, where we discuss Sia's two-token model and address the challenges associated with ICOs.


Sianotes served as precursors to Siafunds. In 2014, we made Sianotes available to investors, and in mid-2015, when the Sia network was launched, we exchanged them for Siafunds. It's worth emphasizing that Sianotes were acquired in exchange for Bitcoin and were issued on the NXT Asset Exchange.

The Sia team did not knowingly sell unregistered securities. During the 2014 offering, we were unaware that the SEC might consider Sianotes or Siafunds securities. This offering took place months before Ethereum's emergence and years before the SEC issued guidance related to cryptocurrencies.

While we appropriately registered our 2018 offering of Siafunds in response to the SEC's 2017 guidance regarding digital assets, we are disappointed that the SEC opted to take action regarding our relatively small 2014 offering.

Impact on the Sia Ecosystem

Sia Network

The SEC settlement has no impact on the Sia network. As indicated in the settlement terms, the SEC took no enforcement action regarding the Siacoin token or ongoing Sia network activities. Nebulous is not obliged to register the Siacoin token as a security with the SEC. After an extensive SEC investigation, no changes or restrictions were imposed on the Sia network.

Sia Project

The SEC did not pursue enforcement actions against the Siacoin token or ongoing Sia network activities. There were no criminal charges brought against Nebulous or the Sia core developers. The cryptocurrency community may see the settlement as a reinforcement for the Sia project, given the SEC's decision not to take any enforcement action related to the Siacoin token.

Sia Foundation

The settlement does not impact our decision to conduct future offerings of Siafunds. Similar to our 2018 offering, we will classify future Siafunds offerings as securities unless there are changes in regulatory guidance.


The listing of Siacoin on exchanges remains unaffected. The SEC did not initiate enforcement actions concerning the Siacoin token or ongoing Sia network activities. Nebulous is not required to register the Siacoin token as a security with the SEC, and the SEC had comprehensive information about Siacoins, including their trading on various global exchanges. We are ready to provide any exchange with a legal opinion regarding Siacoin's status under U.S. securities law.


The recent settlement does not impact users or holders of Siacoins for cloud storage rentals. The SEC refrained from taking enforcement actions regarding Siacoins despite understanding how they are created and used. You can continue using Siacoins on the Sia network if you rent cloud storage. Siacoin holders can store them in wallets or trade them on supported exchanges.

For Siacoin miners, the settlement does not affect their operations. The SEC did not pursue enforcement actions despite understanding Siacoin's creation and usage. Miners can confidently continue their activities.

The settlement does not affect Siafunds purchased during the April 2018 offering. The offering was conducted in full compliance with regulations, following SEC guidelines under Regulation D. All Siafunds acquired during the 2018 offering were distributed to investors after a one-year lockup period.

It's important to note that the SEC classified Siafunds as securities under U.S. laws. If you exchanged Sianotes for Siafunds in 2014, we recommend researching relevant securities laws in your country. In the United States, accredited investor status may be required to buy or sell Siafunds.

We strongly advise consulting with an attorney for guidance on this matter.

For more detailed information, please visit the following links:

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