According to public documents, the regulator has returned $4.6 million to investors in connection with the now-defunct BitClave ICO.
The funds were being disbursed under the BitClave Fair Fund, set up to ‘make whole harmed investors’ of an Ethereum-based search engine ICO. Closed-end funds: After the notice and claims process, investors will receive their shares, the SEC shared in a tweet.
In 2017, BitClave sold its Consumer Activity Tokens (CAT) to 9,500 investors within its 32-second ICO and successfully garnered $25.5 million. However, in 2020, the SEC took the startup to Court for the unlawful ICO since it was not registered under digital asset securities law.
SEC Expands Crypto Crackdown With Record Settlements
BitClave did not plead guilty but agreed to the terms offered by the SEC. The company would be ordered to refund all the $25.5m raised from investors, pay an 8% pre-judgment interest of $3.4 m, and pay a $400,000 penalty. The company also agreed to burn out its 1 billion CAT tokens that did not circulate in the market and remove the token from trading platforms.
In the settlement, the Defendants also included BitClave in creating a fund fund for investor restitution. The investors’ claims were due by August 2023, and notifications on the status of these claims were to be made in mid-March 2024.
Even though it committed $29 million to the Fair Fund, SEC documents showed that BitClave had endowed just $12 million by February 2023.
The case is one of several others that the SEC has commenced against companies it accuses of conducting unregistered securities sales and fraud in the cryptocurrency industry. Some of the giant targets are Ripple Labs, Binance, and Coinbase.
Law enforcement agencies resolved 8 cryptos lawsuits totaling $19.45 billion up to October 2024, a 78.9% improvement in settlement value over 2023.
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