After several cases shaking the cryptosphere, the Securities and Exchange Commission (SEC) continues to wage war on unregistered ICOs. The American regulator has just indicted Craig Sproule and his two companies, Crowd Machine and Metavine, for having sold tokens in the form of a security without being authorized to do so. The facts are said to date back to the period from January to April 2018 and involve CMCT (Crowd Machine calculation) tokens. Explanations.
$ 5.8 million embezzled without the knowledge of investors
At the launch of the ICO in 2018, Mr. Sproule announced that the funds raised would be used to develop new technologies for Metavine. In particular, the company was to use it to finance activities that would lead to the execution of its application development software on a decentralized network. Investors have responded overwhelmingly to this call, as they have injected up to $ 5.8 million into Metavine’s ICO. The SEC now reveals that this sum has been embezzled by Mr. Sproule and Crowd Machine who have it. transferred to gold mining entities in South Africa without notifying investors.
Further, the SEC asserts that the sale of CMCT constituted an unregistered securities offering. She adds that Mr. Sproule and his companies have knowingly sold the tokens without determining if the investors were accredited. In its complaint, the SEC accuses Mr. Sproule and Crowd Machine of violating the anti-fraud and registration provisions of federal securities laws. In addition, Metavine acts as a back-up defendant in court. This means that the company is considered an innocent party, but is holding funds on behalf of CrowdFund.
SEC fines Sproule $ 195,047
Faced with the extensive evidence provided by the SEC, the defendants neither admitted nor denied the allegations. However, they consented to judgments that would prevent them from committing future violations or participating in ICOs. In the event of further violations on their part, they will be forced to permanently deactivate CMCT tokens and withdraw it from the market.
Furthermore, it was agreed that Mr. Sproule will no longer exercise the function of officer or director of a public company. He will also have to pay the sum of 195,047 dollars to the American regulator as a fine. Finally, the court in charge of the case reserves the right to pronounce a civil sanction against the latter in the coming days.
After more than three years, Mr. Sproule and his companies were finally overtaken by SEC investigators. This case proves once again that the American regulator will pursue projects in an irregular situation within the cryptosphere to the end. The policeman of the financial markets has just added to his team a collaborator of the Senate to better regulate cryptocurrencies.
Source: The Bloc Crypto
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 in some crypto only increased my enthusiasm. I therefore resolved to study and understand blockchain and its many uses and to relay information relating to this ecosystem with my pen.
