Blockchain of Things, a New York-based cryptocurrency startup, has settled a case with the Securities and Exchange Commission (SEC) for $250,000 over an unregistered ICO. The project, which purports to offer enterprise-grade blockchain solutions, raised $13 million in December 2017, but in doing so the SEC claims that it violated a number of rules, including the illegal sale of securities.
Blockchain of Things Fails to do its Paperwork
Blockchain of Things fell foul of the SEC’s rules in the wake of July 2017’s DAO Report of Investigation, which stated that ICOs could be considered securities offerings. In investigating the Blockchain of Things ICO, the SEC found that the project sold its BCOT tokens to US investors and engaged four “resellers” to serve as the exclusive sellers of in foreign countries without restrictions on resale of those tokens to US investors. They also found that Blockchain of Things did not register its ICO as a security and did not qualify for an exemption from these registration requirements.
Blockchain of Things Gets off Lightly
Rather than fighting the case, Blockchain of Things has agreed to pay a $250,000 fine, which is small fry compared to some other cases – EOS.io were fined $24 million for selling illegal securities, while Shopin was recently hit with a $42 million charge. The case is another example of 2017’s chickens coming home to roost – this was a time when crypto fever was in full swing, and every man and his dog was creating an ICO, with little regard for the rules.
Given the amount of ICOs that were launched during and in the wake of 2017’s ICO boom, it is fair to say that Blockchain of Things isn’t the last project that will be handing over a big cheque to the SEC, with Telegram’s massive $1.7 billion ICO, which the SEC successfully halted in October, the likely headline case of 2020.