BitClave PTE. LTD. ("BitClave") has reached a civil settlement with the U.S. Securities and Exchange Commission (the "SEC") in connection with BitClave's sale of its Consumer Activity Tokens ("CAT") in a November 2017 initial coin offering.
The SEC is entering an administrative cease-and-desist order under which BitClave neither admits nor denies the SEC's findings. The settlement resolves all ongoing matters between BitClave and the SEC. The settlement provides, among other things, that BitClave will pay disgorgement of $25.5 million, in addition to prejudgment interest of $3,444,197 and a civil monetary penalty of $400,000. The SEC also will create a "Fair Fund" pursuant to Section 308(a) of the Sarbanes Oxley Act of 2002. The disgorgement, prejudgment interest, and civil penalty will be aggregated in the Fair Fund, which will be used to compensate purchasers of CAT according to a distribution plan to be developed by a "Fund Administrator," who will be appointed by the SEC.
BitClave agreed to transfer all 1.32 billion CAT in its possession or control to the Fund Administrator to enable the Fund Administrator to permanently disable such CAT. BitClave also agreed to take reasonable steps to convey the SEC's order to digital asset trading platforms that offer trading of CAT, to request the removal of CAT from the platforms, and to publish notice of such requests on BitClave's website and social media channels.
The company issued the following statement regarding the announcement: "We are pleased to resolve this regulatory matter with the SEC. We are grateful to have had support from a team and a community passionate about data privacy and finding ways to enable consumers to control when and how they share data."
UPDATE: Pursuant to the SEC Order, on May 30, 2020 BitClave requested that YoBit remove CAT from its platform.