- BitClave pays $4.6M in restitution to affected ICO investors.
- The SEC filed a lawsuit against BitClave in 2020 over its unregistered ICO.
The U.S. Securities and Exchange Commission (SEC) has disbursed $4.6 million to investors affected by BitClave’s 2017 unregistered initial coin offering (ICO). The payout follows a settlement reached in 2020, where BitClave agreed to repay the $25.5 million raised during its ICO, in addition to paying $4 million in penalties and interest.
The checks are in the mail. We are sending out more than $4.6M to investors harmed by BitClave, PTE Ltd.’s unregistered ICO of digital asset securities. After a notice & claims process, investors will now be receiving their share of the BitClave Fair Fund. https://t.co/VSmrObLZUa pic.twitter.com/zUdHRkAoS2
— U.S. Securities and Exchange Commission (@SECGov) November 20, 2024
The SEC launched its lawsuit against BitClave in 2020, alleging that the company’s sale of its Consumer Activity Token (CAT) violated federal securities laws. BitClave’s ICO raised $25.5 million in just 32 seconds, attracting thousands of investors. However, the SEC argued that the ICO was an unregistered securities offering, with the company inducing investment by suggesting that the CAT token would appreciate.
Under the terms of the settlement, BitClave agreed to forfeit the funds raised, pay penalties, and burn 1 billion unsold tokens. Additionally, the company requested exchanges to delist the token. Although BitClave did not admit to any wrongdoing, the settlement required the company to pay nearly $29 million to a restitution fund.
SEC’s Ongoing Crypto Oversight
The SEC established the BitClave Fair Fund to compensate affected investors. Eligible investors were required to file claims by August 2023, with the SEC completing its review by March 2024. Following the review, the SEC announced that payments had been distributed to investors who filed successful claims.
However, questions remain regarding the remaining balance of the fund. As of February 2023, only $12 million had been remitted to the fund, leaving an outstanding $7.4 million. The SEC has not provided further details on the collection of the remaining funds. Since the BitClave case, the SEC has taken over 100 enforcement actions against various crypto companies under the Biden administration.
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