SEC v. BitClave

On May 28, 2020, the SEC instituted and settled cease-and-desist proceedings against BitClave PTE Ltd., a Singapore-based blockchain company with operations in San Jose, California, for violating Sections 5(a) and 5(c) of the Securities Act of 1933 by conducting an unregistered Initial Coin Offering (ICO) of Consumer Activity Tokens (CAT) from July 2017 to November 2017, raising $25.5 million from ~9,500 investors, including U.S. persons. The SEC alleged the CAT tokens were securities sold without registration or exemption, facilitated over the internet. BitClave agreed to pay $29.3 million ($25.5 million disgorgement, $3.44 million prejudgment interest, $400,000 civil penalty), with ~$12 million remitted to a Fair Fund for harmed investors under Section 308(a) of the Sarbanes-Oxley Act. By November 19, 2024, $4,614,679.81 was distributed to eligible claimants, leaving $7,385,320.19 unclaimed. On March 18, 2025, BitClave filed a motion for relief, arguing that retaining the leftover funds for transfer to the U.S. Treasury violates Liu v. SEC (591 U.S. 71, 2020), which limits disgorgement to victims’ net losses. BitClave seeks return of the $7.38 million, citing equitable principles and the SEC’s inconsistent crypto enforcement. The proceeding remains unresolved as of May 20, 2025, with no SEC ruling on the motion reported.