The SEC will distribute over $4.6 million to investors affected by BitClave’s unregistered ICO. The payout follows a claims process under the BitClave Fair Fund.
The U.S. Securities and Exchange Commission (SEC) has verified the distribution of more than $4.6 million to investors who were affected by the unregistered initial coin offering (ICO) of blockchain startup BitClave.
The funds will be distributed from the BitClave Fair Fund after a notice and claims procedure has been completed.
BitClave’s $29 million ICO settlement
“The checks are present in the mail.” In a post on X, the SEC disclosed that it is distributing over $4.6 million to investors who were harmed by BitClave, PTE Ltd.’s unregistered ICO of digital asset securities.
BitClave was a blockchain-based startup that aimed to revolutionize the digital advertising industry by developing a decentralized search engine that would eliminate intermediaries such as Google AdWords, thereby enabling businesses to communicate directly with consumers.
In 2017, the initiative conducted an initial coin offering (ICO) to raise funds by selling its native Consumer Activity Token (CAT). According to reports, the event was a resounding triumph, garnering over $25 million from nearly 9,500 investors in less than one minute.
Nevertheless, BitClave’s aspirations were quickly dashed when the SEC filed a lawsuit against the project in 2020, asserting that its initial coin offering (ICO) had contravened federal securities laws. The company subsequently resolved the charges by agreeing to reimburse all the funds that were raised, without acknowledging any misconduct.
The total amount owed to the SEC, which was approximately $29 million after penalties and interest were added, was intended to be refunded to investors.
Claims Process and Notice
The Notice of Proposed Plan of Distribution for the Fair Fund was published by the agency’s Division of Enforcement on December 1, 2022. On February 9, 2023, the proposal was approved, which included a comprehensive methodology for the distribution of the fund and any accrued interest to investors.
Investors who were eligible for compensation were obligated to submit claims by August 2023. The Securities and Exchange Commission (SEC) informed them of the acceptance or denial of their claims in March 2024.
The SEC evaluated and approved the payment file submitted by the fund administrator. The regulatory body has authorized the transfer of $4.6 million from the Fair Fund to an escrow account, as indicated in the most recent filing. The funds will be distributed in accordance with the approved plan.
It is intriguing that BitClave, despite its agreement to contribute $29 million to the SEC’s fund as part of the settlement, had reportedly only contributed $12 million. The regulator’s release of funds will result in an additional $7.4 million remaining, and there is currently no information regarding its disposition.
