The U.S. Securities and Exchange Commission has settled charges against the issuer of an initial coin offering.
The firm, Blockchain of Things Inc. (BCOT), is said to have raised close to $13 million following an ICO that began in December 2017. This offering constituted an unregistered sale of tokens, the SEC said Wednesday, and as part of the settlement, BCOT will pay a fine of $250,000 and start a process of returning funds to investors who purchased the token should they request a refund.
According to the statement, BCOT undertook activities that ran afoul of the SEC's regulations in its bid to build a blockchain-focused development platform. Notably, the SEC mentioned its mid-2017 release on ICOs, the so-called DAO report, as a warning for would-be issuers of tokens that such offerings could constitute sales of securities.
"The SEC’s order found that BCOT sold its digital tokens to U.S. investors and engaged four 'resellers' to serve as the exclusive sellers of BCOT's digital tokens in certain foreign countries without restrictions on resale of those tokens to U.S. investors," the agency said. "The order further found that BCOT did not register its ICO pursuant to the federal securities laws, nor did it qualify for an exemption from the registration requirements."
"The company also will register its tokens as securities pursuant to the Securities Exchange Act of 1934 and will file required periodic reports with the Commission. BCOT consented to the order without admitting or denying the findings," the statement further explained.
The SEC's full order can be found here.