SEC Distributes $4.6M to BitClave Investors

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

As reported by the SEC, the BitClave Fair Fund distributed a total of $4.6 million to qualified investors who participated in BitClave’s initial coin offering (ICO) back in 2017. This ICO, which took place during the peak of the 2017 ICO craze, managed to collect an impressive sum of $25.5 million from a multitude of investors within only 32 seconds.

In 2020, during the tenure of Jay Clayton as SEC Chair, the Securities and Exchange Commission (SEC) filed a lawsuit against BitClave, alleging that their sale of the Consumer Activity Token (CAT) was in violation of federal securities laws. BitClave chose to settle these charges without admitting any guilt or fault. As part of the settlement, they agreed to forfeit all funds raised during their 2017 campaign, amounting to the original sum plus an additional $4 million in interest and penalties. Furthermore, they agreed to destroy any uncirculated CAT tokens and request that trading exchanges remove it from their listings, as outlined in the settlement agreement.

Despite having agreed to repay around $29 million to the SEC’s fund for reimbursing investors, BitClave had only paid approximately $12 million as of February 2023, according to the latest SEC document outlining the BitClave Fair Fund plan. Investors who were eligible were required to file their claims by August 2023. The SEC notified claimants whether their claims were accepted or rejected in March this year.

It’s uncertain as of now how the remaining $7.4 million from the BitClave Fair Fund will be handled. Neither the SEC nor the fund administrator have provided a response to CoinDesk’s request for comment or clarification on the inconsistency between the disbursed amount and the money in the BitClave Fair Fund by the deadline.