The US Securities and Exchange Commission is suing Australian Craig Derrell Sproul for “fraudulent and unregistered sale of digital assets” in an initial coin offering (ICO) that his company completed in 2018.

The Securities and Exchange Commission said Thursday that Metavine Inc. Sproule, owned by Sproule, which ran an ICO for the Crowd Machine (CMCT) from January to April 2018, sold unregistered securities, never launched the project, and “significantly distorts the way it intends to use the continuation of the ICO.” ”

In total, the Securities and Exchange Commission said Sproule raised at least $ 33 million but now lacks “sufficient capital to fund ongoing operations.” Lack of funds is at the heart of the SEC case.

The Securities and Exchange Commission announcement on Thursday in the case indicates that Sproul has agreed to provisions prohibiting him, the Crowd Machine and Metavine from making multiple offerings of securities. They must also “permanently disable CMCT tokens and require them to be removed from digital asset trading platforms.” According to CoinGecko, CMCT is currently only available for trading on HitBTC.

Sproule was banned from becoming an employee of a public company and ordered to pay a fine of $ 195,047.

Although Sproul told investors that the proceeds from the ICO will be used to fund the development of a decentralized peer-to-peer network, the complaint states that $ 5.8 million of ICO funds were sent to the South African mining company in the form of credit or equity. in companies. So far, none of this money has been returned, and Sproul has not returned the investment.

The complaint also explains how CMCT tokens were supposed to operate in the Crowd Computer ecosystem to pay device owners to use their computing power and software developers to write code. However, tokens never made it to the ecosystem.

The Securities and Exchange Commission states that the CMCT is an investment contract classified as a security and that Crowd Computer and Metavine have not registered their sales with a commission:

“A number of courts have specifically determined that offering and selling digital assets such as the CMCT are investment contracts, and therefore such digital assets are ‘securities’ under federal securities laws.”
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Source: CoinTelegraph