The United States Securities and Exchange Commission, known as SEC, has recently issued a penalty to one unregistered ICO worth $250,000. After reaching a settlement with the New York-based startup Blockchain of Things Inc. (BCOT), the SEC imposes a fine for conducting an unregistered initial coin offering (ICO).
On December 18, an official press release coming from the SEC showed that the charges were settled in the form of an order which requires BCOT to cease and desist from committing any violation of the registration provisions of the federal securities laws. As the cryptocurrency news show, the blockchain company also agreed to pay a $250,000 penalty without admitting or denying these findings.
As the order from SEC imposes, BCOT is guilty for raising nearly $13 million while conducting an unregistered ICO to develop and implement a blockchain-based platform which allows for third-party developers to build applications for message transmission, digital asset generation and digital asset transfer.
In that manner, BCOT will need to return the $13 million in raised funds “to those investors who purchased tokens in the ICO and request a return of the funds.” However, it is still unclear how many investors will make such a request.
The SEC also explained that the company will also “register its tokens as securities pursuant to the Securities Exchange Act of 1934 and will file required periodic reports with the Commission.”
As the blockchain news show, SEC imposes a penalty for BCOT on the subject of failing to register its ICO in accordance with federal securities laws. The US SEC also said that the blockchain startup did not qualify for an exemption from registration requirements.
As the Associate Director of the SEC’s Division of Enforcement Carolyn M. said:
“BCOT did not provide ICO investors with the information they were entitled to receive in connection with a securities offering. We will continue to consider appropriate remedies, such as those in today’s order, to provide investors with compensation and required information and to provide companies who conducted unregistered offerings with an opportunity to move forward in compliance with the federal securities laws.”
Before this, SEC also charged Eran Eyal who is the founder of Shopin with orchestrating a fraudulent ICO.
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