February 6, 2023

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Securities and Exchange Commission (SEC) has termed the initial coin offering that Bloom protocol offered in 2018 as securities. Therefore, the agency requested the protocol to duly register its tokens to avoid facing a $31M fine.

SEC Claimed BLT Qualified To Be Registered As Securities 

According to the reports, the SEC recently discovered that in 2018, Bloom offered its ICO as an investment contract without registration. The regulators, therefore, gave the startup firm 9months to register its coins as securities. 

The government agency announced the order and allegation against the Bloom protocol on its official page on Tuesday. Statistics showed that Bloom amassed about $30.9M from its 7.4k global users during the ICO in 2018. 

The figures suggested that the SEC charged the startup based on the rate of profits in cryptos that it acquired then. Bloom protocol is a decentralized credit scoring solution platform that came into existence in 2017. 

It is aimed at preventing and mitigating the risk of fraud and identity theft. SEC accused that Bloom offered it BLT during the ICO such that any investor who bought it then would surely expect to profit from it sometimes later. 

The agency alleged the startup of doing that to increase the value of its native coin. Following SEC’s standard, the Howey Test, Bloom’s token (BLT) qualified for securities.

BLT Price Action Significantly Drop After SEC Order

Price charts revealed that the BLT token has not been performing well since January 2018 when it hit its all-time high at $1.38. Its price tanked as it lost about 80% of its all-time high value a few months later. 

Afterward, it rose to $1 briefly in May 2018. However, after the SEC’s fine warning, BLT has lost about 70% of its value. BLT has an all-time high market cap of about $60M during the bullish market in 2018. 

However, the Bloom protocol native coin is currently at a $500,000 market cap. Contrary to SEC’s accusations, Blood claimed that its token was overbought during the presale where it earned a $50M hard cap. 

However, the SEC claimed that the presale and public sale price data did not tally with Bloom’s claims. According to statistics, the presale saw an average purchase of $340K while after the launch, the average sale was $2K.

Bloom now has just 279days to register its token, BLT, as a security token under SEC. The regulators also ordered the firm to create a refund application for its users to reclaim their funds within 60days. 

And the firm has to pay all its customers within 90days when the refund claim application would end. News has it that Bloom has not yet responded to the refund form that Blockwork submitted at the time of publication.

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