Blockchain services company BitClave Pte. Ltd. settled with the U.S. Securities and Exchange Commission (SEC) on charges of conducting an unregistered initial coin offering (ICO) of its Consumer Activity Tokens (CAT).
The SEC is entering an administrative cease-and-desist order under which BitClave neither admits nor denies the SEC’s findings. It was found that BitClave violated the registration provisions of the federal securities laws as it failed to register their offers and sales of CAT, which constituted securities.
The proposed blockchain-powered search engine agreed to return proceeds from the offering and pay additional monetary relief to be distributed to the affected investors through a Fair Fund.
BitClave agreed to pay disgorgement of $25.5 million, prejudgment interest of $3.44 million, and a civil monetary penalty of $400,000.
San Jose, California-based BitClave also agreed to transfer all 1.32 billion CAT in its possession or control to the Fund Administrator for permanent disabling, publish notice of the order, and request removal of CAT from all digital asset trading platforms. BitClave also requested YoBit to remove CAT from its platform.
The blockchain services firm is currently winding down its operations and does not plan to continue developing or supporting the platform.
BitClave has been charged by the SEC for raising more than $25 million by selling CAT to approximately 9,500 investors, including investors in the U.S., between June 2017 and November 2017.
The company had planned to use the ICO proceeds to develop, administer, and market a blockchain-based search platform for targeted consumer advertising. BitClave had emphasized on its expectation that the tokens would increase in value, and took steps to make the tokens available for trading on third-party digital asset trading platforms after the ICO.
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