The SEC sends $4.6m to investors involved in BitClave ICO

The U.S. Securities and Exchange Commission distributed $4.6 million in funds to investors participating in BitClave’s initial coin offering.

The SEC announced in a recent filing that BitClave’s Ethereum-based search engine ICO allowed more than $4.6 million to be funneled to “bad investors” pursuant to a refund plan.

“Following a notification and claims process, investors will now receive their share of the BitClave Fair Fund,” the SEC wrote in an X post.

Through its short 32-second ICO, BitClave sold its Consumer Activity Token to 9,500 investors and raised approximately $25.5 million. In 2020, the SEC filed a lawsuit against crypto startup BitClave for allegedly violating securities law by not registering its ICO as a digital asset security.

BitClave did not admit any wrongdoing but reached a settlement with the SEC. As part of the settlement agreement, BitClave agreed to refund all $25.5 million in ICO sales. He also had to pay $3.4 million in prejudgment interest, as well as a $400,000 fine.

Additionally, the startup agreed to destroy the circulating supply of 1 billion CAT tokens and remove the token from exchanges.

In addition to paying compensation, the SEC ordered BitClave to establish a Fair Fund to facilitate the returns of investors participating in the ICO.

According to the application, investors requesting a refund had to make a request before the deadline set for August 2023. Notifications of damage were sent in March this year.

BitClave has pledged to contribute $29 million to the SEC’s Fair Fund for investor compensation. But as of February 2023, BitClave had only managed to set aside $12 million for investor compensation, according to information in the SEC document detailing BitClave’s Fair Fund.

BitClave’s lawsuit is just one of many that the SEC has filed against crypto industry players over the past few years. Ripple Labs, Binance and Coinbase are among the many crypto firms that have come under scrutiny for alleged unregistered securities transactions and fraudulent practices.

As previously reported by Crypto.news, law enforcement has settled eight cases throughout 2024 for $19.45 billion as of October 2024. Although the year is not over, the settlement value in 2024 is already up 78.9% compared to the previous year.