'Checks in the mail': SEC to partially reimburse investors in online advertising blockchain startup BitClave
Quick Take The SEC is distributing millions of dollars to investors in a failed online advertising blockchain startup. BitClave raised over $25 million in an unregistered initial coin offering in 2017.
Nearly two years after announcing its plan to reimburse investors in a failed blockchain project, the U.S. Securities and Exchange is putting the “checks in the mail,” according to an announcement on Wednesday.
BitClave, a defunct startup, previously agreed to repay all the funds it raised and pay a $4.6 million fine to settle a U.S. Securities and Exchange Commission lawsuit related to an unregistered initial coin offering in 2017.
The SEC sued BitClave in 2020, alleging that its $25.5 million crowdfund of the Consumer Activity Token (CAT) three years earlier violated federal securities laws. BitClave reported raised millions of dollars from thousands of investors in a matter of minutes.
In total, BitClave agreed to pay around $29 million into the BitClave Fair Fund, a structure for distributing penalties and disgorgements to defrauded investors. It is unclear whether the startup ever paid the full sum; as of February 2023, according to CoinDesk, there was only $12 million in the account.
“The Plan provides for the distribution of the Fair Fund, plus accumulated interest, less taxes, fees, and expenses, to the harmed investors according to the methodology set forth in the Plan,” SEC Secretary Vanessa Countryman wrote in a filing today.
BitClave investors were required to submit claims by August 2023 and were notified if they were eligible to receive compensation this past March.
The SEC’s lawsuit came during a wave of litigation launched by former agency Chair Jay Clayton, which targeted crypto projects that raised funds in an ICO during the 2017-2018 bull market.
Clayton, who was responsible for high-profile litigation against Ripple, Telegram and Kik while serving as SEC chair from 2017 to 2020 under Trump’s previous administration, was chosen last week by the President-elect to be Attorney for the Southern District of New York.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
SingularityNET partners with Mina for privacy-focused decentralized AI
Huge ‘screw-up’ — Pump Science apologizes after flood of fraud tokens
Crypto hackers steal $71M in November, bringing yearly total to $1.48B
Non-USD stablecoins can spur adoption: Report