US SEC has reached a settlement with New York-based startup Blockchain of Things Inc (BCOT) for conducting an unregistered ICO and imposes a $250k penalty.
19 December, 2019 | AtoZ Markets – Blockchain of Things Inc. (BCOT) is a technology company built to develop and implement blockchain technology. It also provides a platform, or web services layer which is designed to improve the technology of existing blockchain, including safety and ease of use.
US SEC Imposes $13M Return and $250k Penalty for Unregistered ICO
Blockchain of Things Inc. (BCOT) said it raises nearly $ 13 million following an ICO. That began in December 2017. The offering was an unregistered sale of tokens, the SEC said on Wednesday. Also, as per the settlement, BCOT will pay a fine of $ 250,000. Moreover, it will initiate a process of returning the funds to investors who bought the token if they request a refund.
According to the press release, BCOT has undertaken activities that have violated SEC regulations. That is its attempt to build a blockchain-focused development platform. However, the SEC mentioned its mid-2017 release on ICOs, called DAO report, as a warning to potential token issuers. Such offerings could constitute sales of securities.
According to the said statement: “SEC found that BCOT had sold its digital tokens to American investors. Also, it had hired four resellers to serve as exclusive sellers of BCOT’s digital tokens in certain foreign countries. It happened without restrictions on the resale of these tokens to investors American investors.”
“The company will also register its tokens as securities under the Securities Exchange Act of 1934. And it files the required periodic reports with the Commission. BCOT consented to the order without accepting or denying the findings.”
Read More: Ripple Price Might Face Major Issues in 2020
BCOT did not Provide Proper Information to ICO Investors
The SEC concluded that BCOT had not registered its ICO per federal securities laws. Also, it was not eligible for an exemption from the registration requirements. Carolyn M. Welshhans, Associate Director of the SEC’s Division of Enforcement, explained:
“BCOT did not provide ICO investors with the information to which they entitled in connection with a security offering. We will continue to consider appropriate remedies, such as those provided in today’s order, to provide investors with the compensation and required information and to give companies that have made non-registered offerings with the opportunity to move forward per federal securities laws. “
Think we missed something? Let us know in the comments section below.