The United States Securities and Exchange Commission (SEC) has filed a suit against Australian Craig Derel Sproule for the allegedly “fraudulent and unregistered” sale “of digital asset securities” in an Initial Coin Offering his company conducted in 2018.
The SEC alleges in a Jan. 6 complaint that Sproule’s company, Metavine, Inc. which operated the ICO for Crowd Machine (CMCT) from Jan. to April 2018, sold unregistered securities, never made the project operational and “materially misrepresented how it intended to use ICO proceeds.”
In total, the SEC says Sproule raised at least $33 million dollars, but that he now lacks “sufficient capital to fund continued operations.” The reason for his lack of funds goes to the core of the SEC’s case.
A Jan. 6 announcement from the SEC regarding the case indicates that Sproule agreed to provisions which prohibit him, Crowd Machine and Metavine from performing any more securities offerings. They must also “permanently disable the CMCT tokens and seek their removal from digital asset trading platforms.” CMCT is currently only available for trade on HitBTC according to CoinGecko.
Sproule is prohibited from becoming an officer of a public company and has been ordered to pay a $195,047 fine.
Although Sproule told investors that ICO proceeds would be used to fund the development of a decentralized peer-to-peer network, the complaint states that $5.8 million of the ICO funds were sent to a South African mining operation as a loan or for equity in the company. So far, none of those funds have been recovered and…