SEC Distributes $4.6M to BitClave Investors

“Some investors in defunct crypto startup BitClave will soon get their money back, plus interest, according to a Wednesday announcement from the U.S. Securities and Exchange Commission (SEC).”, — write: www.coindesk.com

Some investors in defunct crypto startup BitClave will soon get their money back, plus interest, according to a Wednesday announcement from the U.S. Securities and Exchange Commission (SEC).

“The checks are in the mail,” the SEC posted to X on Wednesday afternoon.

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According to the SEC, the BitClave Fair Fund has disbursed a collective $4.6 million to eligible investors in BitClave’s 2017 initial coin offering (ICO). BitClave’s ICO, which occurred during the 2017 ICO boom, raised $25.5 million from thousands of investors in just 32 seconds.

In 2020, under former SEC Chair Jay Clayton, the SEC sued BitClave alleging that the sale of its Consumer Activity Token (CAT) violated federal securities laws. BitClave settled the charges without admitting any wrongdoing, and agreed to forfeit the entirety of the money it raised in 2017, plus another $4 million in interest and penalties. It also agreed to destroy all uncirculated CAT and request that exchanges delist it as part of the settlement agreement.

Though BitClave agreed to pay approximately $29 million to the SEC’s fund to pay back investors, it had only paid $12 million as of February 2023, according to the SEC’s most recent document detailing the plan for the BitClave Fair Fund. Eligible investors were required to submit their claims by August 2023. The SEC informed claimants if their claims were accepted or denied this past March.

It is unclear what will happen with the remaining $7.4 million in the BitClave Fair Fund. Neither the SEC nor the fund administrator responded to CoinDesk’s request for comment or clarification on the discrepancy between the disbursement amount and the amount in the BitClave Fair Fund by press time.

Edited by Nikhilesh De.

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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

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