The U.S. Securities and Exchange Commission (SEC) has won the case against now inoperative crypto firm, Rivetz Corp and its CEO Steven Sprague over $18 Million in ICO.
On September 30, Massachusetts Federal Court Judge Mark Mastroianni approved SEC’s claim that Sprague provided Ethereum-based Rivetz (RvT) tokens to the US users through Rivetz, and sold unregistered securities. As per the conclusion of the order, SEC will confer with Sprague and file a proposed judgment for injunctive and monetary relief on or before October 22, 2024.
The SEC sued the inoperative blockchain hardware company and Sprague in September 2021, accusing the company of selling $18 million worth of Rivetz tokens to more than 7,200 investors in 2017, one-third of whom were in the United States.
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The significant facts of the case remained undisputed by either of them. However, Steven Sprague(representing himself) claimed that the token was a software product, not an ‘investment contract under the Howey test’, which denotes the definition of ‘securities’ as claimed by the SEC.
But the judge Mastroianni ordered, “From the time the ICO was first announced until its completion, Rivetz and Sprague made statements to potential purchasers that explicitly tied the value of the RvT tokens to Rivetz’s goal of creating a secure ecosystem for mobile devices.”
The order went on to say that the White Paper told potential purchasers that Rivetz had a viable security product ready to fill significant market demand and the product’s success would drive demand for RvT tokens, propelling its value. Sprague can file any objections to the proposed judgment on or before November 5, 2024.
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