UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933

Release No. 10788 / May 28, 2020

ADMINISTRATIVE PROCEEDING

File No. 3-19816

ORDER INSTITUTING CEASE-ANDDESIST PROCEEDINGS PURSUANT 

TO SECTION 8A OF THE 

SECURITIES ACT OF 1933, MAKING 

FINDINGS, AND IMPOSING A 

CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that ceaseand-desist proceedings be, and hereby are, instituted pursuant to 8A of the Securities Act of 1933 

(“Securities Act”), against BitClave PTE Ltd. (“BitClave” or “Respondent”).

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 

Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings 

Pursuant to Section 8A of the Securities Act of 1933, Making Findings, and Imposing a Cease-andDesist Order (“Order”), as set forthbelow.

In the Matter of

BITCLAVE PTE LTD. 

Respondent.
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III.

On the basis of this Order and Respondent’s Offer, the Commission finds that:

Summary

1. BitClave is an early-stage blockchain services company that operates through an 

entity in Singapore and maintains its principal place of operations in San Jose, California. From 

June 2017 through November 2017, BitClave offered and sold securities in the form of digital 

tokens to fund the development of a blockchain-based search platform for targeted consumer

advertising. As part of this process, BitClave conducted an initial coin offering (“ICO” or the 

“offering”) in which it raised approximately $25.5 million through the issuance of digital assets 

called Consumer Activity Tokens (“CAT”) to approximately 9,500 investors, including individuals 

in the United States.

2. Based on the facts and circumstances set forth below, the CAT were offered and 

sold as investment contracts and therefore were securities. A purchaser in the offering would have 

had a reasonable expectation of obtaining a future profit based on BitClave’s efforts to develop and 

market the platform after the offering, to support the growth of the platform, and cause the price of 

the tokens to increase. BitClave also highlighted to purchasers that they would have liquidity for 

their investments because BitClave would undertake efforts to make CAT available on digital asset 

trading platforms. BitClave violated Sections 5(a) and 5(c) of the Securities Act by offering and 

selling securities without having a registration statement filed or in effect with the Commission or 

qualifying for an exemption from registration.

Respondent

3. BitClave is headquartered in San Jose, California and operates through BitClave 

PTE Ltd., a Singapore private limited company constituted on July 17, 2017. Neither BitClave nor 

its securities, nor BitClave’s principals, are registered with the Commission in any capacity.

Facts

BitClave Planned to Use the Offering Proceeds to Build the Platform

4. In June 2017, BitClave began marketing the development of a platform called the 

BitClave Active Search Ecosystem (“BASE”). BitClave advertised that on BASE, once developed, 

customers would receive a digital asset the company created, CAT, in exchange for viewing and 

interacting with targeted ads. Around the same time, BitClave began marketing an ICO through 

which it would sell CAT to raise money for the project to developBASE. BitClave released a 

White Paper (“White Paper”) on its website explaining the business plan, the details of which 

BitClave revised several times during the offering. BitClave promoted its business plan and the 

CAT offering widely by presenting at several industry events in the United States and abroad, 

posting on various online forums such as social media websites and news blogs, including Twitter, 

Facebook, Telegram, Slack, and Medium, as well as posting videos on YouTube produced by the 

company.

5. In the White Paper, BitClave stated that businesses would be able to use BASE to 

“directly market to customers whose searches align with the goods and services being offered,” 

while “customers can earn CAT tokens for interacting with directly targeted ads.” BitClave 

provided the diagram below in its marketing materials to illustrate the company’s model and 
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potential advantages of BASE compared to established search providers:

6. BitClave represented in the White Paper that it would pool the money raised in the 

offering, which it referred to as a “fundraiser,” and use it to develop, administer, and market 

BASE. Specifically, BitClave stated that it would use 38% of the proceeds for development of the 

platform, 37% for expanding adoption of the platform, and the remaining 25% for administration, 

advisers, legal expenses, and other costs.

7. BitClave stated that it planned to create a total supply of 2 billion CAT, up to half 

of which the company would sell in the ICO. The company planned to distribute the remaining 

tokens for “long term budget,” “community grants,” and to the “team,” which included executives, 

employees, and advisors of the company.

BitClave Offered and Sold CAT to the General Public

8. BitClave publicly announced a so-called “pre-sale” phase of the offering from July 

25, 2017 through August 1, 2017, during which CAT were sold to the general public at discounts 

of up to 50% off the initial price of $.05 per token. BitClave sold about 60 million CAT to

approximately 1,000 purchasers in the pre-sale phase, including to persons in the United States, in 

exchange for the equivalent of approximately $1.5 million worth of digital assets.

9. BitClave also engaged in a bounty program during the offering, through which 

BitClave allocated approximately 9 million CAT to over 600 individuals in exchange for online 

marketing activities that they provided in support of the offering.

10. BitClave conducted the final phase of the offering on November 29, 2017. 

BitClave priced CAT at $.10 per token for the final phase, but provided bonus tokens in varying 

amounts to investors who had made deposits prior to November 29, 2017. BitClave sold 

approximately 611 million CAT to approximately 8,500 purchasers during the final phase of the 

offering, including to persons in the United States, for the equivalent of approximately $24 million 

worth of digital assets. BitClave announced that it met its “hard cap” of $25.5 million total raised 

within 32 seconds of the official start of this phase of the sale.

11. In total, BitClave raised $25.5 million through the sale of approximately 680 

million CAT in the offering. In January 2018, BitClave created a total of 2 billion CAT on the 

Ethereum blockchain and distributed the 680 million CAT tokens that had been purchased in the 

offering. Shortly thereafter, the tokens began trading on digital asset trading platforms. BitClave 

continues to retain the remaining 1.32 billion CAT.
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BitClave Promoted CAT as an Opportunity to Obtain Future Profits from the Efforts of 

BitClave and Its Agents, and CAT Purchasers Would Have Reasonably Expected That They 

Would Profit from BitClave’s Efforts

12. BitClave had not fully developed and launched its BASE platform at the time of

the offering. In or around October 2017, BitClave released an “alpha,” or preliminary, version of 

the smart contracts for BASE. Around the same time, BitClave released a limited application built 

on the BASE platform in an effort to demonstrate proof of concept.

13. In the offering materials, BitClave described the development and marketing

efforts the company had undertaken leading up to the ICO, the work the company planned to 

perform to increase the value of the platform in the future, and the technical credentials and work 

experience of the BitClave team. In the “Growth Plan” section of the White Paper, BitClave 

explained that “[a]s part of the initial ecosystem bootstrapping, we have already introduced 15-20 

small companies for the initial instance of the BASE market ... Once our small market is

established, we will increase our marketing efforts to continually expand the numbers of players 

involved.” BitClave also explained in the White Paper that “[o]nce the platform is launched, team 

BitClave will shift significant focusto marketing to small and medium businesses to build the

retail side of the marketplace.” BitClave identified several team members on its website and 

boasted that the team “consists of 20 engineers and [an] advisory board of world-class talents in 

the fields of security, payments, and blockchain.”

14. BitClave emphasized an expectation that the price of CAT would appreciate. In 

the White Paper, BitClave stated that “since the total volume of CAT is fixed, token exchange 

among the growing population of retail partners and customers implies a general growth model for 

CAT value,” and “as more service providers join, the amount of CATs required for an equivalent

service will gradually decrease, corresponding to a [] CAT valueincrease.”

15. CAT purchasers would have reasonably expected they would obtain future profits 

if BitClave was successful in its entrepreneurial and managerial efforts to develop its business. 

Fueling such expectations, the day before the final phase of the ICO, BitClave tweeted a link to a 

video titled “Time Sensitive Initial Coin Offering (ICO) Launch Info on BitClave CAT Search 

Engine.” This video featured an investor promoting the “profit potential” of the BitClave token 

offering.

16. In its offering materials, BitClave stated that CAT would be used “internally 

within BASE among the participating parties” once the platform was developed and could 

incentivize users to participate in the BASE platform. It did not, however, identify any specific 

means for token holders to use CAT within the BASE “ecosystem.” Rather, BitClave stated that 

the tokens could be traded on digital asset trading platforms, and that BitClave planned to make 

trading of CAT available on digital asset trading platforms after completing the token distribution. 

CAT purchasers would have reasonably expected an opportunity to profit by selling the tokens 

following the token distribution.

17. Following the ICO, BitClave contacted over a dozen digital asset trading 

platforms, requesting that they make CAT available for trading on the platforms. CAT was traded 

on multiple platforms, and BitClave did not request or impose any trading restrictions on CAT.

18. By mid-2019, CAT had been removed from at least four digital asset trading 

platforms.
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BitClave’s Lawsuit against a Co-Founder and Its Wind Down

19. On May 22, 2018, BitClave filed a complaint in California state court against its 

former officer, director and co-founder. In the course of that litigation, BitClave alleged that the cofounder and his affiliated entity, misused company funds that were raised in the CAT offering. On 

November 12, 2019, after a three-week trial, the jury returned a verdict against the co-founder and 

his affiliated entity, awarding BitClave $7.6 million in damages on its claim for conversion against 

them, $2.5 million on its claim for breach of fiduciary duty against the co-founder, and $2.5 

million on its claim for fraud against his affiliated entity. BitClave is endeavoring to collect on its 

judgment.

20. Due in large part to the distraction and cost of legal matters, including 

BitClave’s lawsuit against the co-founder, BitClave determined that its business plan would not 

be viable and is in the process of winding down its operations entirely. The company does not 

plan to continue developing, operating, or marketing the platform.

BitClave Offered and Sold CAT in Violation of the Securities Act

21. Based on the facts and circumstances set forth above, CAT were offered and sold

as investment contracts and therefore securities pursuant to SEC v. W. J. Howey Co., 328 U.S. 293 

(1946), and its progeny, including the cases discussed by the Commission in its Report of 

Investigation Pursuant To Section 21(a) of the Securities Exchange Act of 1934: The DAO 

(Exchange Act Rel. No. 81207) (July 25, 2017) (the “DAO Report”).

22. No registration statements were filed or in effect for BitClave’s offers and sales of 

securities and the offers and sales did not qualify for an exemption from registration under the 

Securities Act.

23. As a result of the conduct described above, BitClave violated Section 5(a) of the 

Securities Act, which states that “[u]nless a registration statement is in effect as to a security, it 

shall be unlawful for any person, directly or indirectly, (1) to make use of any means or 

instruments of transportation or communication in interstate commerce or of the mails to sell such 

a security through the use or medium of any prospectus or otherwise, or (2) to carry or cause to be 

carried through the mails or in interstate commerce, by any means or instruments of transportation, 

any such security for the purpose of sale or for delivery after sale.”

24. As a result of the conduct described above, BitClave violated Section 5(c) of the 

Securities Act, which states that “[i]t shall be unlawful for any person, directly or indirectly, to 

make use of any means or instruments of transportation or communication in interstate commerce 

or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or 

otherwise any security, unless a registration statement has been filed as to such security.”

Undertakings

1. Respondent has undertaken to:

A. Transfer all 1.32 billion CAT in its possession or control to the Fund 

Administrator within 10 days of receiving notice of the Fund Administrator’s appointment, to 

enable the Fund Administrator to permanently disable such CAT.

B. Pay toward satisfaction of the amounts ordered in Section IV.B below all 

amounts recovered related to the Offering, including all amounts reasonably recoverable through 
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litigation and through any tax refund process, with the sole exception that BitClave may retain the 

rights to its intellectual property. If BitClave elects to liquidate the rights to its intellectual 

property before the amounts ordered in Section IV.B below have been satisfied, or BitClave has 

paid all reasonably recoverable assets toward satisfaction of the amounts ordered and certified 

compliance with the undertakings as required in undertaking 2 below, amounts received from the 

liquidation of the intellectual property shall be paid toward satisfaction of the amounts ordered.

C. Publish notice of the Order on BitClave’s website and social media 

channels, in a form not unacceptable to Commission staff, within 10 days of the date of this 

Order.

D. Take reasonable steps to convey this Order to digital asset trading 

platforms that offer trading of CAT and request the removal of CAT from the platforms, and 

publish notice of such requests on BitClave’s website and social media channels, in a form not 

unacceptable to Commission staff, within 10 days of the date of this Order.

E. Not pursue any voluntary dissolution proceedings in Singapore until after 

the amounts ordered in Section IV.B below have been satisfied, or BitClave has paid all 

reasonably recoverable assets toward satisfaction of the amounts ordered and certified 

compliance with the undertakings as required in undertaking 2 below.

2. Respondent shall certify, in writing, compliance with the undertakings set forth 

above. The certification shall identify the undertakings, provide written evidence of compliance 

in the form of a narrative, including steps reasonably taken to recover amounts through litigation 

and any tax refund process, and be supported by exhibits sufficient to demonstrate compliance. 

The Commission staff may make reasonable requests for further evidence of compliance, and 

Respondent agrees to provide such evidence. The certification and supporting material shall be 

submitted to Kristina Littman, Chief, Cyber Unit, Division of Enforcement, with a copy to the 

Office of Chief Counsel of the Enforcement Division, no later than thirty (30) days from the date 

of the completion of the undertakings.

3. Respondent may apply to the Commission staff for an extension of the deadlines 

set forth above before their expiration and, upon a showing of good cause by Respondent, which 

may include ongoing efforts to collect funds owing to Respondent, to defend claims against 

Respondent, or to wind down its operations, the Commission staff may, in its sole discretion, grant 

such extensions for whatever time period it deems appropriate.

4. In determining whether to accept the Offer, the Commission has considered these 

undertakings.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer.

Accordingly, it is hereby ORDERED that pursuant to Section 8A of the Securities Act:

A. Respondent cease and desist from committing or causing any violations and any 

future violations of Sections 5(a) and 5(c) of the Securities Act.

B. Respondent shall pay disgorgement of $25,500,000, prejudgment interest of 
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$3,444,197, and a civil penalty of $400,000, to the Securities and Exchange Commission. Payment 

shall be made in the following installments: (1) $10,000,000 within 14 days of the entry of this 

Order; and (2) the remainder within 180 days after the entry of this Order. Payments shall be 

applied first to post-Order interest, which accrues pursuant toSEC Rule of Practice 600 and to 31 

U.S.C. 3717. Prior to making the final payment set forth herein, Respondent shall contact the staff 

of the Commission for the amount due. If Respondent fails to make any payment by the date and/or 

in the amount according to the schedule set forth above, all outstanding payments under this Order, 

including post-Order interest, minus any payments made, shall become due and payable 

immediately at the discretion of the staff of the Commission without further application to the 

Commission.

Payment must be made in one of the following ways:

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or

(3) Respondent may pay by certified check, bank cashier’s check, orUnited 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying the 

party as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 

cover letter and check or money order must be sent to Kristina Littman, Chief, Cyber Unit, 

Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549, or such other 

person or address as the Commission staff may provide.

C. Respondent shall comply with the undertakings enumerated in Paragraphs 1.A, C., 

and D. above.

D. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund is 

created for the disgorgement, prejudgment interest, and penalties referenced in paragraph B above. 

Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated as 

penalties paid to the government for all purposes, including all tax purposes. To preserve the 

deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall

not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of

compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in

this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 

Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 

Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 

Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 

additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 

in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 
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damages action brought against any Respondent by or on behalf of one or more investors based on 

substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding.

E. The disgorgement, prejudgment interest, and civil penalty shall be aggregated in 

the Fair Fund, which shall be maintained in the type of account directed by the Commission staff. 

The Commission will appoint a Fund Administrator who will develop a distribution plan (the 

“Plan”) and administer the Plan in accordance with the Commission Rules on Fair Fund and 

Disgorgement Plans. The Fair Fund shall be used to compensate injured investors for losses 

resulting from the violations determined herein and to cover the costs of administration of the Fair 

Fund. Any amount remaining in the Fair Fund after all distributions have been made and costs 

have been paid shall be transmitted to the Commission for transfer to the U.S. Treasury.

By the Commission.

Vanessa A. Countryman

Secretary