The United States Securities and Exchange Commission, or SEC, has made an announcement today in regards to a settlement of charges. This time, the settlement was done by Blockchain of Things Inc. (BCOT), a blockchain technology firm. BCOT settled in regard to the conducting of an unregistered initial coin offering (ICO) of its digital tokens.
Unregistered ICO Worth $13 Million
According to the order of the SEC, the startup company based in New York conducted its ICO back in December 2017. Ith it, the firm garnered almost $13 million for it to develop and implement BCOT’s business plans. These plans included the development of a blockchain-based platform and technology. The platform that BCOT was developing was made with the intent to allow third-party developers to build various applications on it. Applications that would be used for digital asset generation and transfer as well as message transmission and logging.
With this settlement, BCOT will now cease and desist from violating or continuing to violate the registration provisions set out by the federal securities laws. Along with that, the company will have to pay a $250,000 penalty fee. The firm will be mandated to further return the funding of the various investors that purchased tokens within its ICO, requesting a return of the tokens in kind. Afterward, BCOT will take steps to register its tokens as securities under the Securities Exchange Act of 1934, and will, therefore, need to file reports with the SEC after that periodically.
New Ways To Remedy the Situation
Carolyn M. Welshhans, the Associate Director of the Division of Enforcement of the SEC, explained the situation. She stated that BCOT failed to provide its ICO investors with regards to the information they needed when it comes to a securities offering. Welshhans explained that the SEC as a whole was continuing to consider ways to remedy this properly. She cited this case specifically, where the investors were provided with proper compensation as well as the required information. The SEC also allowed the company who provide said unregistered offering the chance to move forward with federal compliance.
The SEC has been working hard, cracking down on various companies, with this past week seeming to have a very high workflow in terms of settling with multiple companies over improper security use.
The Dawn of Regulated Crypto
The crypto industry as a whole is now experiencing the “growing pains” of a world, finally starting to regulate crypto adequately. That said, the old “wild west” era of crypto is slowly beginning to close. The crypto industry will gradually become a regularly accepted part of the world, but it will be probably first experience the “snake oil” period as well. Many people will use the fact that something is blockchain-based to sell a product, simply because of that fact alone.