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SEC charges Blockchain of Things $250,000 for ICO violation; Payment to be completed in the next 30 days

Blockchain startup Blockchain of Things will be paying the SEC a total of $250,000, with each payment divided into four segments at $62,500 each.

Fri, 20 Dec 2019, 10:39 am UTC

Tech startup Blockchain of Things (BCOT) has agreed to pay the Securities and Exchange Commission (SEC) $250,000 for its initial coin offering (ICO) that was launched in 2017. The payment will be divided into four segments, with each payout amounting to $62,500.

The SEC expects the company to pay the initial payment in the next 30 days, after which Blockchain of Things will subsequently submit the next three in the next 60, 90, and 120 days. Failing to follow this payment schedule will result in penalty interest.

The SEC has maintained that all ICOs are categorized as securities and are subject to registration to the regulatory body. Since Blockchain of Things didn’t register its 2017 ICO, the SEC filed a cease-and-desist order against the tech startup.

An expensive oversight

To dive deeper into the matter, BCOT entered an agreement with four resellers situated in Vietnam, Japan, South Korea, and the United Arab Emirates. Although these resellers were supposed to distribute the tokens only within their respective borders, BCOT didn’t enforce strict monitoring where the tokens are being sold.

“BCOT had no visibility into the Foreign Resellers’ token sales practices, such as what disclosures and representations were made by the Foreign Resellers to potential purchasers. BCOT also lacked any visibility into the identity of potential purchasers,” the SEC filing read.

SEC weeding out the crypto ecosystem

The SEC has been cracking down on these illegal ICO ever since the popularity of Bitcoin chuck the crypto industry into the mainstream scene. Just last week, the regulatory body charged Shopin’ founder Eran Eyal with defrauding investors after it launched an ICO that raised $42 million.

The money was supposed to fund the development of a blockchain-based shopper profile that can record a purchaser’s behavior and logged it on a digital ledger. Instead, Eyal spent $500,000 of the raised fund to support his lavish lifestyle.

Meanwhile, the SEC is also trying to get to the bottom of the Telegram case that’s been brewing for a while. The agency has already taken the deposition of two Telegram employees and is slated to acquire the statements of the company’s CEO on Jan. 7 or 8.

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