Thursday, December 19, 2019

US SEC imposes $250,000 Penalty on New York-based startup BCOT

The United States Securities and Exchange Commission (SEC) in a press release published on December 18, announced that it has reached a settlement with New York-based startup Blockchain of Things Inc. (BCOT) for conducting an unregistered initial coin offering (ICO) in December 2017.

According to the press release, the charges were settled in the form of an order. In the light of this order, the blockchain company has agreed to pay a penalty of $250,000, without denying or admitting the allegations. The regulator also requires the company to return $13 million to investors raised in ICO.

New York-based startup BCOT conduct its initial coin offering in December 0f 2017 and raised nearly $13 million to “develop and implement its business plans, including developing its blockchain-based technology and platform.”

The commission released a Decentralized Autonomous Organization (DAO) report of investigation on July 25, 2017 that considered ICOs as a security offering. It requires blockchain companies to take appropriate steps to ensure compliance with the U.S. federal securities laws for capital raising. According to the document, All securities offered and sold in the United States must be registered with the Commission or must qualify for an exemption from the registration requirements.”

But BCOT did not register its ICO in pursuant with the US Federal Securities laws. The SEC order further state that BCOT sold its digital token to US investors and also engaged four resellers who sold token to foreign investors without restrictions on resale of those tokens to U.S. investors.

Carolyn M. Welshhans, associate director in the SEC’s Division of Enforcement who was part of the team investigating the matter, stated:

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.”

BCOT has agreed to the order and also will register its tokens as securities according to SECURITIES EXCHANGE ACT OF 1934.”

The United States Securities and Exchange Commission (SEC) also charged the founder of Shopin Eran Eyal for a fraudulent ICO that raised more than $42 million from August 2017 to April 2018.

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