The U.S. Securities and Exchange Commission (SEC) announced on Wednesday that it will be distributing a $4.6 million settlement to investors of the defunct crypto startup BitClave. This settlement includes both the original investment amount and additional interest.
BitClave’s initial coin offering (ICO) took place during the 2017 ICO boom and managed to raise $25.5 million from thousands of investors in just 32 seconds. However, in 2020, the SEC filed a lawsuit against BitClave, alleging that the sale of its Consumer Activity Token (CAT) violated federal securities laws.
As part of the settlement, BitClave agreed to forfeit the entire amount raised in 2017, along with an additional $4 million in interest and penalties. The company also committed to destroying all uncirculated CAT and requested exchanges to delist it.
While BitClave agreed to pay around $29 million to the SEC’s fund to reimburse investors, as of February 2023, only $12 million had been paid. Eligible investors were required to submit their claims by August 2023, and the SEC notified claimants of the acceptance or denial of their claims in March.
There is currently a discrepancy of $7.4 million in the BitClave Fair Fund, and it is unclear what will happen to this remaining amount. Both the SEC and the fund administrator have not provided any comments or clarification on this matter at this time.
CoinDesk, the media outlet covering the cryptocurrency industry, provided this information. CoinDesk journalists adhere to strict editorial policies to ensure integrity, editorial independence, and freedom from bias. It is part of the Bullish group, which invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive equity-based compensation from the Bullish group.
Cheyenne Ligon, a news reporter for CoinDesk focusing on crypto regulation and policy, reported this news without holding any significant crypto investments. Follow @cheyenneligon on Twitter for more updates on this topic.