SEC compensates BitClave ICO investors for their losses

The United States Securities and Exchange Commission recently announced that it has sent $4.6 million in reparations to investors who participated in BitClave’s initial coin offering (ICO). This payment is part of a settlement that BitClave agreed to in 2020 after the SEC charged the search engine for not registering its 2017 ICO as a securities offering.

BitClave, an Ethereum-based search engine, agreed to reimburse approximately 9,500 investors who had participated in its $25.5 million ICO three years prior. While BitClave did not admit to any wrongdoing, it committed to returning the $25.5 million raised from the ICO and paying around $4 million in additional penalties. These funds were placed into an escrow account called the Fair Fund, which the SEC distributed to investors on November 20.

In 2017, BitClave launched the Consumer Activity Token (CAT), which the SEC argued was a securities offering because investors were led to believe that CAT would increase in value. The project’s white paper indicated that as more service providers joined, the number of CATs required for a specific service would decrease, leading to an increase in CAT value.

As part of the settlement agreement, BitClave also agreed to burn 1 billion uncirculated CAT tokens and request that exchanges delist the token. The SEC has taken a strong regulatory stance towards cryptocurrencies under the administration of President Joe Biden, with over 100 regulatory actions being brought against industry companies.

In related news, there have been discussions about creating a new White House post dedicated to cryptocurrency policy, signaling a growing interest and focus on crypto regulation at the highest levels of government. And while there have been changes in leadership within the SEC, the agency continues to enforce regulations and hold companies accountable for violations.

Overall, the distribution of these reparations to BitClave ICO investors represents an important step towards accountability and investor protection in the cryptocurrency space.