SEC Slaps BCOT with $250,000 Penalty for Illegal ICO

The Securities and Exchange Commission (SEC) has imposed a fine of $250,000 on Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term of Things Inc. (BCOT) for selling unregistered tokens via an Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term).

The penalty was imposed as part of the settlement deal between the regulator and the ICO issuer. The SEC also ordered the company to return funds to all its investors.

In a token sale conducted in December 2017, just at the peak of the hype of the ICO market, BCOT raised nearly $13 million, and like most of the projects, it raised the money without having any working model.

According to the company, its platform was intended to allow third-party developers to build applications for message transmission and logging, digital asset generation, and digital asset transfer.

ICO qualifying as unregistered securities

The US regulator alleged that the company was engaged in selling unregistered securities and also sold digital tokens to US-based investors.

“[The company] engaged four “resellers” to serve as the exclusive sellers of BCOT’s digital tokens in certain foreign countries without restrictions on resale of those tokens to U.S. investors,” the announcement stated.

The clampdown comes after the company failed to register its ICO pursuant to the federal securities laws as it did not qualify for an exemption from the registration requirements.

Mentioning the settlement, Carolyn M. Welshhans, associate director in the SEC’s division of enforcement, 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.”

Earlier this week, the regulatory agency charged blockchain project Shopin for defrauding hundreds of investors by raising $42 million with the selling of unregistered securities.