Blockchain of Things (BCOT) conducted a $12 million initial coin offering (ICO) between December 2017 and July 2018. This was during the height of ICO mania, and pretty much any blockchain-based idea was able to raise millions of dollars back then. However, now Blockchain of Things is facing heavy penalties due to violating securities regulations.
Essentially, the Securities and Exchange Commission (SEC) declared unregistered ICOs to be illegal well before the Blockchain of Things ICO. Despite this, Blockchain of Things conducted the ICO without registering, and did not have an applicable exemption.
Also, the SEC says Blockchain of Things used instruments of communication for interstate commerce, which is another violation.
Blockchain of Things ultimately settled with the SEC instead of going to court. Blockchain of Things will have to issue a press release notifying the public about the settlement, and prominently post the settlement info on their website. Further, Blockchain of Things will have to register their BCOT token as a security.
The real knockout blow is that Blockchain of Things will have to return all invested funds to investors who submit claims, in addition to a $250,000 civil penalty paid to the SEC.
The SEC says that Blockchain of Things and its BCOT token can continue operating in the future as long as all securities regulations are met and periodic reports are submitted to the SEC, making it sound like Blockchain of Things is just paying some penalties and then it will become a registered security token.
However, Blockchain of Things will most likely have to declare bankruptcy, and likely will not be able to meet the settlement condition of repaying investors, since undoubtedly most of the invested money has been spent, or lost due to the significant decline in the crypto market since the ICO.
Thus, yet another ICO bites the dust, and many more will likely follow as the SEC continues its sweep of the crypto space.