The federal securities regulator has long held that ICOs are a sort of security and thus must be registered.
In an order dated Wednesday, BCOT agreed to refund investors who notify the firm they need their a refund. It must make efforts to tell token buyers individually and on its website of the potential claim.
According to the SEC, the firm raised nearly $13 million from the ICO in December 2017 even after the regulator warned the firm its token sales might be considered securities offerings, citing its investigation of another company, DAO, in 2017.
BCOT sold its digital tokens to U.S. investors and engaged four “resellers” to function the exclusive sellers of the tokens in foreign countries where it can resell the tokens to U.S. investors, consistent with the SEC’s findings.
In its pre-sale white book, BOT said a part of the funding from the ICO would develop a blockchain-based platform to permit third-party developers to create applications for message transmission and logging, digital asset generation, and digital asset transfer, the firm said within the statement.
Under the settlement, BCOT will register its tokens as securities and file periodic reports with the SEC.
A slew of crypto startups launched ICOs to boost money for his or her tokens amid the bitcoin market boom at the top of 2017, running afoul of the SEC, which considers token sales securities that should be subject to federal securities laws and knowledge disclosure.
Earlier in December, the SEC charged crypto startup Shopin and its CEO Eran Eyal with fraud involving a $42 million unregistered ICO.
In September, the SEC ordered EOS maker Block.One to pay $24 million in penalties for not registering with the commission. the corporate raised over $4 billion via an ICO in May 2018.