The Securities and Exchange Commission has ordered a New York-based crypto startup to pay a fine of $250,000 for conducting an unregistered initial coin offering (ICO).
The SEC, on Wednesday, has imposed a $250,000 penalty on a crypto startup for violating the registration provisions of the federal securities laws, according to an official press release.
The startup, Blockchain of Things Inc. (BCOT), allegedly raised around $13 million from an unregistered ICO that they had started in December 2017, violating the SEC’s DAO Report of Investigation guidelines, which says that ICOs can be securities offerings.
The SEC’s order requires BCOT to return the $13 million in raised funds “to those investors who purchased tokens in the ICO and request a return of the funds.”
The New York startup will also need to “register its tokens as securities pursuant to the Securities Exchange Act of 1934 and will file required periodic reports with the Commission,” said the SEC.
The SEC also found that BCOT did not provide its ICO investors all the information that they were entitled to receive regarding a securities offering,” said the Associate Director in the SEC’s Division of Enforcement, Carolyn M. Welshhans.
“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,” Welshhans added.