2 years ago
The Securities and Exchange Commission (SEC) has charged Craig Sproule of Australia, on with 2 crypto companies helium founded – Crowd Machine Inc. and Metavine Inc. – with defrauding investors.
The SEC said successful a statement Thursday that Sproule and Crowd Machine utilized implicit $5.8 cardinal successful proceeds from an archetypal coin offering offered betwixt January and April 2018 to put successful golden mining entities successful South Africa, which wasn’t disclosed to investors.
The SEC says Sproule initially told investors that proceeds would beryllium utilized to make a caller exertion that would alteration Metavine Inc.’s existing application-development bundle to tally connected a decentralized web of users’ ain computers. Sproule claimed to person raised $40.7 cardinal done his companies successful the archetypal coin offering, according to the SEC.
The SEC besides alleged that Crowd Machine and Sproule did not decently registry their offers and income of Crowd Machine Compute Tokens (CMCT), and sold the tokens to groups of investors without determining whether they were accredited.
The ailment filed successful the United States District Court for the Northern District of California ordered Sproule to wage a $195,047 civilian penalty. Without admitting oregon denying the allegations, Sproule and Crowd Machine person consented to judgments permanently banning them from participating successful aboriginal securities offerings. They besides agreed to question the removal of CMCT tokens from crypto trading platforms.
Disgorgement, prejudgment involvement and civilian penalties for Crowd Machine volition beryllium determined by the tribunal astatine a aboriginal date, arsenic volition disgorgement and prejudgment involvement for Metavine Inc.
“As alleged, Sproule and Crowd Machine misled investors astir however they were utilizing ICO proceeds, spending funds connected an wholly unrelated scheme,” Kristina Littman, main of the SEC Enforcement Division’s Cyber Unit, said successful the statement.
“We volition proceed to clasp accountable issuers of integer plus securities who neglect to supply fulsome and truthful disclosure to the public,” she added.
Michael Bellusci is CoinDesk's crypto payments reporter.
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