The payment is part of a settlement BitClave agreed to pay in 2020 after the SEC sued the search engine for failing to register as a securities offering.
The U.S. Securities and Exchange Commission (SEC) announced on Nov. 20 that it has sent $4.6 million in reparations to investors affected by BitClave’s unregistered initial coin offering (ICO).
The payment stems from a 2020 settlement in which BitClave, an Ethereum-based search engine, agreed to resolve charges for not registering its 2017 ICO as a securities offering.
In a post on the X platform, the SEC stated:
“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.”
Settlement Details
In 2020, BitClave agreed to reimburse approximately 9,500 investors who participated in its $25.5 million ICO. While the company did not admit to any wrongdoing, it committed to returning the funds raised and paying an additional $4 million in penalties.
The SEC placed the settlement funds into an escrow account, known as the Fair Fund, which it distributed to investors on Nov. 20.
The SEC had classified BitClave’s Consumer Activity Token (CAT) as a security, arguing that investors expected its value to increase. A 2020 SEC filing cited the CAT white paper, which claimed:
“[A]s more service providers join, the amount of CATs required for an equivalent service will gradually decrease, corresponding to a CAT value increase.”
As part of the settlement, BitClave also agreed to burn one billion uncirculated CAT tokens and request the removal of CAT from exchanges.
Broader Regulatory Context
Under President Joe Biden’s administration, the SEC adopted a stricter approach toward cryptocurrency, initiating over 100 enforcement actions against industry participants.
In contrast, President-elect Donald Trump has pledged to overhaul crypto regulations, including promising to “fire” SEC Chair Gary Gensler. Trump has also expressed ambitions to make the U.S. “the crypto capital of the world.”
On Oct. 2, the SEC’s enforcement head, Gurbir Grewal, stepped down, further fueling speculation about regulatory changes under the new administration.
Trump is reportedly considering creating a dedicated White House crypto role, a first in U.S. history, to shape the government’s cryptocurrency policies.
