SEC Settles with BitClave ICO, Establishes $25M Compensation Fund
- The agreement states that BitClave will return funds to harmed investors via a mechanism called a “Fair Fund.”
BitClave PTE Ltd., who must make those Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term in accordance with an SEC settlement, introduced a plan in 2017 to sell its Consumer Activity Tokens (CAT) to approximately 9,500 investors in the US and elsewhere. The project altered its business model in the same year to develop and market a blockchain-based search platform for targeted consumer advertising. The ICO was pursued to raise funds necessary to build the service.
The SEC was careful to note that they had not accused BitClave of fraud, but rather of failing to register their tokens as securities. Notably, the agreement states that BitClave will return funds to harmed investors via an investor compensation fund called a “Fair Fund.”
In other crypto-related settlements, the SEC used different mechanisms to compensate investors who participated in an initial coin offering. Namely, the ICO issuer has either voluntarily returned all proceeds of the token sale or was required to go through a claims process.
Under the settlement, BitClave must pay almost in total $29 million in disgorgement, interest, and civil penalties, which will be turned over to the SEC for eventual distribution to investors harmed by the ICO.
As explained in the order, the agency determined that BitClave amounted to selling securities without filing a registration or qualifying for a registration exemption.
Earlier in February, Hester Peirce, an SEC regulator dubbed “CryptoMom,” has floated the idea of offering a ‘safe harbor’ to ICOs so that some crypto tokens are not treated as securities. Peirce proposed a three-year grace period for cryptocurrency startups to tweak their token-based fundraising models in new directions. As such, crypto tokens meeting specified criteria could be issued more freely before the SEC determine whether they need to comply with the federal securities laws.
BitClave PTE Ltd., who must make those Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term in accordance with an SEC settlement, introduced a plan in 2017 to sell its Consumer Activity Tokens (CAT) to approximately 9,500 investors in the US and elsewhere. The project altered its business model in the same year to develop and market a blockchain-based search platform for targeted consumer advertising. The ICO was pursued to raise funds necessary to build the service.
The SEC was careful to note that they had not accused BitClave of fraud, but rather of failing to register their tokens as securities. Notably, the agreement states that BitClave will return funds to harmed investors via an investor compensation fund called a “Fair Fund.”
In other crypto-related settlements, the SEC used different mechanisms to compensate investors who participated in an initial coin offering. Namely, the ICO issuer has either voluntarily returned all proceeds of the token sale or was required to go through a claims process.
Under the settlement, BitClave must pay almost in total $29 million in disgorgement, interest, and civil penalties, which will be turned over to the SEC for eventual distribution to investors harmed by the ICO.
As explained in the order, the agency determined that BitClave amounted to selling securities without filing a registration or qualifying for a registration exemption.
Earlier in February, Hester Peirce, an SEC regulator dubbed “CryptoMom,” has floated the idea of offering a ‘safe harbor’ to ICOs so that some crypto tokens are not treated as securities. Peirce proposed a three-year grace period for cryptocurrency startups to tweak their token-based fundraising models in new directions. As such, crypto tokens meeting specified criteria could be issued more freely before the SEC determine whether they need to comply with the federal securities laws.