$25M ICO project that once promised decentralized search to return funds following SEC charges
May 28, 2020, 3:43PM EDT
1 min read
The Securities Exchange Commission (SEC) has ordered decentralized search startup BitClave to pay back investors of an unregistered initial coin offering (ICO) as part of a settlement agreement.
The SEC alleged that BitClave violated securities laws by emphasizing the expectation that its Consumer Activity Token (CAT) would increase in value, as well as making the token available for trading on third-party platforms without registering the ICO.
The firm held the ICO back in 2017, touting a system in which users could search with the product and sell their data for targeted ads.
BitClave has agreed to pay the $25,500,000 made in the ICO back to investors with an interest of $3,444,197, in addition to an SEC-imposed penalty of $400,000. BitClave neither admitted or denied the allegation in its agreement to pay the charges related to its ICO.
"Issuers of securities, traditional or digital, must comply with the registration requirements of the federal securities laws," Kristina Littman, head of the SEC Enforcement Division's Cyber Unit, said in a statement. "The remedies ordered by the Commission will provide meaningful relief to investors in this unregistered offering."
CAT has since been removed from many third-party trading platforms and the firm has agreed to request its removal from all platforms. The remaining CAT will be permanently disabled.
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