Blockchain of Things Inc. (BCOT), a crypto startup that provides enterprise software to organizations, was charged for introducing an initial coin offering (ICO) despite not being registered. The firm has been making efforts to settle on an agreement with the U.S. Securities and Exchange Commission (SEC) as the company will be paying $250,000 to the regulatory agency.
Blockchain of Things has agreed to refund its investors as per a legal order assigned on Wednesday. All BCOT investors who have informed the company that they want their investments back will receive their funds back.
Since federal securities regulators regard initial coin offerings as a security offering, it is mandatory for new businesses to register with the Commission. BCOT is asked to increase their efforts in notifying the individual buyers about the ICO refund through their online platforms, including official website.
BCOT was able to raise almost $13 million from the initial coin offering in December of 2017, according to reports by the SEC. Additionally, the company did not remove the ICO listing despite consistent warnings from regulators regarding the token sale being potentially considered as a security offering.
According to SEC’s report on the case, BCOT retained four resellers after selling its digital token to US investors, who acted as exclusive sellers of the tokens abroad where the company can resell the digital tokens to investors in US.
The firm claimed on its pre-sale whitepaper that a portion of funding from the ICO will be used for the development of blockchain-based services for creators which will give them a platform to develop applications for logging and message transmission, digital asset transfer and digital asset generation. According to the recent settlement agreement, the firm will register its tokens as securities and will file periodical reports with the Securities and Exchange Commissions.
The SEC and ICOs
After the Bitcoin(BTC)trade market boom in the year 2017, many crypto startups have launched ICOs and have started raising money via their new digital tokens. The SEC has been quick to address this surge as it considers tokens as securities and claims that they should be subjected to federal securities laws and companies should fully disclose such information.
As previously reported by AllStocks Crypto News, the SEC ordered EOS maker Block.One to pay penalties up to $24 million for not registering with the SEC, which had raised over $4 billion through an ICO launched in May of last year. This month, the SEC also penalized another crypto startup, Shopin, and its CEO under charges of fraud that included an unregistered ICO worth $42 million.
