Investors in the now-defunct cryptocurrency startup BitClave are set to receive refunds, including interest, as announced by the U.S. Securities and Exchange Commission (SEC) on Wednesday. The SEC stated that the BitClave Fair Fund has paid out a total of $4.6 million to eligible investors who took part in BitClave's 2017 initial coin offering (ICO), which raised $25.5 million from thousands of investors within just 32 seconds.
The SEC had sued BitClave in 2020, during the tenure of former Chair Jay Clayton, alleging that the company's sale of its Consumer Activity Token (CAT) was in violation of federal securities laws. As part of the settlement, BitClave agreed to relinquish the entirety of the funds raised in 2017, plus an additional $4 million in interest and penalties, without admitting to any wrongdoing. The settlement also required BitClave to destroy all uncirculated CAT tokens and request that exchanges delist them. Although BitClave agreed to pay approximately $29 million into the SEC's fund for investor reimbursement, it had only paid $12 million as of February 2023, according to the SEC's latest document outlining the plan for the BitClave Fair Fund.
Eligible investors were required to submit their claims by August 2023, and the SEC notified claimants of the status of their claims in March. The fate of the remaining $7.4 million in the BitClave Fair Fund remains uncertain, as neither the SEC nor the fund administrator has provided comment or clarification on the discrepancy between the disbursement amount and the amount in the fund.