Checks for BitClave investors have now been mailed. Investors in the controversial 2017 ICO offering can now collect what is rightfully theirs, thanks to this short post on Twitter/X by the Securities and Exchange Commission (SEC). The $4.6 million check was for investors in BitClave’s 2017 ICO offering that used unregistered digital asset securities.
This approved settlement amount was agreed upon in 2020, and it was only on November 20th of this year that the agency confirmed the availability of funds. After a standard notification and claims process, eligible investors can now receive a portion of the BitClave Fair Fund.
The check came in the mail. We are paying more than $4.6 million to investors harmed by BitClave, PTE Ltd.’s unregistered ICO of digital asset securities. After going through the notification and claims process, investors will now receive their shares in the BitClave Fair Fund. https://t.co/VSmrObLZUa pic.twitter.com/zUdHRkAoS2
— U.S. Securities and Exchange Commission (@SECGov) November 20, 2024
SEC Approves $4.6 Million in Funding as Part of Settlement
According to Document Release No. 101653 published on November 19, 2024, BitClave’s investors were paid out $4.6 million. The document states that the agency has set aside $4,614,679.81 to support affected investors.
Funds from the settlement will be raised from equity funds and transferred to an escrow account at Huntington National Bank, N.A., for disposition and distribution. According to the SEC, the checks are currently in transit and the funds will be available once the notification and billing process is completed.
ICO using unregistered securities
In 2017, BitClave’s ICO generated a lot of interest and excitement, raising $25.5 million in 32 seconds. The subject of the ICO was Consumer Activity Tokens (CAT), which were later classified as unregistered securities. According to the SEC, thousands of investors were encouraged to invest in the tokens with the expectation that the price would rise.
Image: Bloomingbit
Under terms of the settlement, the company will refund the money raised and pay $4 million in interest and penalties. In the settlement, John Deaton accused the SEC of relying on a law introduced in 1933.
As a result, the agency established an equity fund to ensure that affected investors receive a share of the proceeds. The SEC has begun filing claims, with filings due in August 2023. Eligible investors received notices in March 2024.
BitClave asked me to destroy my tokens and pay a fine.
As part of the settlement, BitClave promised to return $29 million, including $4 million in fines and $25.5 million raised during the ICO. The company also promised to delist and burn all coins not issued on cryptocurrency exchanges.
In February 2024, the SEC reported that the cryptocurrency industry had delivered only $12 million to the Fair Fund, but failed to deliver that amount, leaving $7.4 million in uncertainty. The agency and fund manager did not provide any additional comment on how the remaining funds would be recovered.
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