The US Securities and Exchange Commission (SEC) is returning $4.6 million to investors affected by an unregistered initial coin offering (ICO) from blockchain startup BitClave. The funds will be paid out from the BitClave Fair Fund following a notice and claims process. The settlement comes after the SEC alleged that BitClave violated federal securities laws during its 2017 ICO, which raised over $25 million from nearly 9,500 investors.
BitClave ultimately agreed to pay back all the money raised, but not admitting any wrongdoings. The total amount due to the SEC was approximately $29 million, earmarked for return to investors. In December 2022, the SEC’s Division of Enforcement published a Notice of Proposed Plan of Distribution for the Fair Fund.
It approved the proposal, including a detailed methodology for distributing the fund and any accrued interest to investors, on February 9, 2023. Investors eligible for compensation were required to submit claims by August 2023, with the SEC notifying them of the acceptance or denial of their claims in March 2024.
Following the fund administrator’s submission of a payment file, the SEC reviewed and accepted it. The latest filing reveals that the regulatory body has authorized the transfer of $4.6 million from the Fair Fund to an escrow account, to be distributed according to the approved plan. However, while BitClave committed to paying $29 million to the SEC’s fund as part of the settlement, the company had paid only $12 million.
The remaining $7.4 million, set to be released by the regulator, has no current information on its disposition.
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