Blockchain of Things Inc. (BCOT) Penalized by SEC for Unregistered ICOs
Crypto Business World
CBW -External Analyst
Dec, 24 2019
The securities exchange Commission (SEC) has imposed a heavy penalty of $250,000 to the New York-based crypto startup Blockchain of Things Inc. (BCOT) for selling the unregistered Initial Coin Offerings (ICOs). The order on December 18, 2019, has confirmed that the BCOT has violated federal security laws and as per the settlement, the startup is fined with $250 000 for violating the provisions. The company had introduced the Initial Coin offerings back in December 2017 and raised almost $13 million from the investors by luring them to expand the BCOT business operations. The company proposed a blockchain-based platform that was supposedly meant to allow the third-party developers to build various apps on it including applications for digital asset generation, digital assets transmission, message transmission among others.
As per the SEC regulations, ICOs are subjected to federal laws and information disclosure and accordingly BCOT had been warned to do so. Ignoring the orders, BCOT did not register its ICO pursuant with the commission and was not even exempted from the registration procedure. It further endorsed four resellers to sell the tokens across the borders. Tokens were then permitted to resell to the US investors which instigated the SEC to jump into the investigation.
BCOT has agreed to settle the charges of the commission by returning the funds to the investors who purchased the tokens. Besides, it has been mandated to register its future tokens as securities with the SEC under the Securities Exchange Act of 1934. The Company will also have to furnish regular reports of its activities to the commission. Carolyn M Welshhans, Associate Director at Division of Enforcement in SEC commented, “ 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.”
SEC’s previous Crypto Regulatory Operations
Recently in December SEC has been stern with another crypto startup UnitedData and charged its CEO Eran Eyal for duping the investors with $42 million through the unregistered ICOs. Back in September, it penalized another crypto startup Block.one with $24 million for conducting an unregistered ICOs without registering with the commission.
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