SEC Returns $4.6 Million to Investors of Ethereum-Based BitClave ICO

The U.S. Securities and Exchange Commission (SEC) has distributed $4.6 million to investors harmed by BitClave’s unregistered initial coin offering (ICO).

The announcement, made on November 20, follows a settlement BitClave reached with the SEC in 2020.

BitClave, an Ethereum-based search engine, conducted a $25.5 million ICO in 2017, offering Consumer Activity Tokens (CAT). The SEC later classified the offering as a securities sale, citing that investors were led to believe CAT would appreciate in value.

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BitClave Agrees to Return Funds Raised

BitClave did not admit wrongdoing but agreed to return the funds raised and pay an additional $4 million in penalties.

“The checks are in the mail,” the SEC said in a statement on X (formerly Twitter). “We are sending out more than $4.6M to investors harmed by BitClave PTE Ltd.’s unregistered ICO of digital asset securities.”

The checks are in the mail. We are sending out more than $4.6M to investors harmed by BitClave, PTE Ltd.’s unregistered ICO of digital asset securities. After a notice & claims process, investors will now be receiving their share of the BitClave Fair Fund. https://t.co/VSmrObLZUa pic.twitter.com/zUdHRkAoS2

— U.S. Securities and Exchange Commission (@SECGov) November 20, 2024

The funds were distributed from the Fair Fund, an escrow account created to compensate approximately 9,500 investors. As part of the settlement, BitClave also agreed to burn 1 billion uncirculated CAT tokens and request the delisting of its token from exchanges.

The case highlights the SEC’s aggressive regulatory approach under President Joe Biden’s administration, which has initiated over 100 actions against crypto firms.

The SEC has taken a tougher stance against crypto firms in 2024. More specifically, the regulator imposed nearly $4.7 billion in enforcement actions against crypto companies, a 3,018% increase from 2023.

The fines included forfeitures, disgorgement, civil penalties, settlements, and prejudgment interest, calculated from the time the SEC initiated each case.

The agency also faced a barrage of criticism during a congressional hearing on Wednesday, 18 September 2024. This came as a predominantly critical witness panel voiced their concerns over the agency’s regulatory approach towards digital assets.

It is worth noting that the regulatory agency has also faced some setbacks. Back in July, the SEC closed its three-year investigation into Hiro Systems. The agency’s conclusion came just a day after it closed a separate case involving stablecoin issuer Paxos.

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Trump Pledges to Overhaul SEC Leadership

In a related development, President-elect Donald Trump has pledged to overhaul the SEC’s leadership.

Trump has criticized the agency’s regulatory stance and promised to replace the current Chair, Gary Gensler. He has also expressed ambitions to make the U.S. the global leader in cryptocurrency innovation.

The SEC has seen notable leadership changes this year, with Gurbir Grewal stepping down as head of enforcement on October 2. Reports suggest that Trump may create a new White House position dedicated to cryptocurrency policy, a historic first.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

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