In May, the U.S. Securities and Exchange Commission (SEC) charged blockchain services company BitClave PTE Ltd. (BitClave) for an unregistered initial coin offering of digital asset securities. BitClave will pay nearly $30 million in disgorgement and penalties.
The SEC claims that from June to November 2017, BitClave raised over $25 million by selling its Consumer Activity Tokens (CAT) to approximately 9,500 investors. However, the SEC alleges that BitClave failed to register its offers and sales of CAT, which constituted securities. The SEC’s order finds that BitClave violated the registration provisions of the federal securities laws. BitClave agreed to pay disgorgement of $25,500,000, prejudgment interest of $3,444,197, and a penalty of $400,000. BitClave neither admitted nor denied the SEC’s findings.
On July 31, the SEC posted a Notice of Covered Action in reference to the case. The Notice of Covered Action signals that qualified individuals should apply for whistleblower rewards. Through the SEC Whistleblower Program, individuals, who willingly provide original information that leads to a successful enforcement action, are entitled to a monetary award. In this case, the award would range from 10-30% of the collected $30 million.
For the past decade, the SEC Whistleblower Program has been essential in exposing and fighting corporate fraud and corruption. Initially created in 2010 with the Dodd-Frank Act’s passage, the program offers monetary awards and anti-retaliation protections to SEC whistleblowers.
Read the SEC’s press release: Unregistered $25.5 Million ICO Issuer to Return Money for Distribution to Investors.