Checks for BitClave investors have now been mailed out. With this brief message on Twitter/X from the Securities and Exchange Commission (SEC), investors of the controversial 2017 ICO offering can now start collecting what is rightfully theirs. The A check for $4.6 million is for investors in BitClave’s 2017 ICO offering of unregistered digital asset securities.
This approved settlement amount was agreed to in 2020 and it was only on November 20 that the agency confirmed the availability of funds. After the standard Notice & Claims process, the qualified investors can now receive their share of the BitClave Fair Fund.
The checks are in the mail. We’re sending more than $4.6 million to investors harmed by BitClave, PTE Ltd’s unregistered digital asset ICO. After a notification and claims process, investors will now receive 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
SEC Approves $4.6 Million Fund as Part of Settlement
According to document release no. 101653, published on November 19, 2024, BitClave’s investors were paid out the amount of $4.6 million. This document notes that the agency has set aside $4,614,679.81 to assist affected investors.
The settlement funds will come from the Fair Fund and be transferred to the escrow account at Huntington National Bank, N.A., for disposition and distribution. According to the SEC, the checks are now on their way and the money will become available after the Notice & Claims procedures.
An ICO with unregistered securities
BitClave’s ICO in 2017 generated a lot of attention and excitement, raising $25.5 million in 32 seconds. The subject of the ICO was the Consumer Activity Token (CAT), which was later classified as an unregistered security. According to the SEC, thousands of investors were encouraged to invest in the tokens in the expectation that they would rise in price.
Image: Bloomingbit
Under the terms of the settlement, the company will return the money raised and pay $4 million in interest and penalties. During the settlement process, John Deaton accused the SEC of relying on laws introduced in 1933.
As a result, the agency created the Fair Fund to ensure affected investors get their share of the proceeds. The SEC initiated the filing of the claims and the filing ended in August 2023. The eligible investors received their notices in March 2024.
BitClave asked to destroy tokens and pay fines
BitClave promised to return $29 million as part of the settlement, which consists of $4 million in fines and the $25.5 million raised during the ICO. The company has also called on crypto exchanges to remove all unspent coins and promises to burn them.
In February 2024, the SEC reported that the crypto industry had transferred only $12 million to the Fair Fund, but left $7.4 million in limbo after failing to repay that amount. The agency and the fund manager did not provide additional comment on the method by which the remaining funds will be collected.
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