SEC Ruling Issued Against BitClave ICO
Unregistered $25.5-million ICO issuer ordered to return money to investors
What Happened?
May 28, 2020: The Securities and Exchange Commission (SEC) found BitClave PTE Ltd. of San Jose, California conducted an unregistered Initial Coin Offering (ICO) between June and November 2017.
Source: https://www.sec.gov/news/press-release/2020-124
Who Is Impacted?
The 9,500+ investors who invested USD $25.5 million into BitClave’s Consumer Activity Token (CAT).
Why This Matters?
Because it was never registered as a security, the public sale of the CAT token violated the registration provisions of federal securities laws in the United States.
In the US, securities issuers must follow registration requirements, or use a registration exemption such as Reg D or Reg CF. Token issuers that use US exemptions must follow specific restrictions and thresholds – for both the primary sale and the secondary market of any security they issue. BitClave has been ordered by the SEC to return all the funds they acquired through this token sale.
What’s Next?
Without admitting or denying the SEC’s findings, BitClave has agreed to pay a total disgorgement of USD $25,500,000, a prejudgment interest of USD $3,444,197, and a penalty of USD $400,000. The SEC’s order also establishes a Fair Fund to return monies paid by BitClave to the 9,500+ injured investors.
Finally, BitClave has also agreed to transfer all of the remaining CAT in its possession to the fund administrator for permanent disabling, publish a notice of the SEC’s order through their site, and request the removal of CAT from all virtual asset trading platforms currently listed for sale or trade.
learn more
Is your AML compliance too expensive, time-consuming, or ineffective?
iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.
Request a demo today.
The Importance of Choosing the Right KYC Vendor: Safeguarding Your Business in the Digital Age
Are you set up for success when it comes to KYC compliance and anti-AML practices? As of Q2 of 2023, an estimated 5.18 billion users have adopted online practices (source). With this rapid rise in digital adaptation comes an increased focus on identifying and...
Streamlining KYC and KYB for Trust and Compliance
With eCommerce continuing to experience exponential growth since increasing over 50% to over $870 Billion over the course of the pandemic (source), financial fraud and digital criminal activity have risen in tandem, posing a significant threat to financial...
Key Considerations for Implementing KYC Software for Your Business
With businesses facing the ongoing challenge of operating in a digital landscape that welcomes an increasing amount of users (source) each year, the need for robust Know Your Customer (KYC) processes has become integral for security and crime prevention. The Financial...