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The Securities and Exchange Commission has charged<\/a> Australian citizen Craig Sproule, as well as the two startups he founded, Crowd Machine, Inc. and Metavine, Inc, for misleading investors about how he is going to use the proceeds of a $41 million initial coin offering (ICO) back in 2018.<\/p>\n The SEC\u2019s lawsuit, which was filed in the United States District Court for the Northern District of California, charges Sproule and Crowd Machine with violating antifraud and registration provisions in the federal securities laws.<\/p>\n\n Sproule has taken to calling himself the \u201cMan behind the Machine,\u201d and claimed to have raised $40.7 million<\/a> through his companies, collectively referred to as \u201cCrowd Machine,\u201d in an initial coin offering of Crowd Machine Compute Tokens between January and April 2018, according to the SEC.<\/p>\n The SEC alleges that Sproule initially told investors that the ICO earnings would be used to develop a new technology that would enable Metavine\u2019s existing application-development software to run on a decentralized network of users\u2019 own computers.<\/p>\n\n\n\n\n But instead, the SEC alleges that Sproule and Crowd Machine used over $5.8 million in proceeds from the ICO to invest in gold mining entities in South Africa, which wasn\u2019t disclosed to investors.\u00a0<\/p>\n\n Additionally, the SEC alleges that Crowd Machine and Sproule failed to properly register their offers and sales of CMCT tokens with the Commission and knowingly sold the tokens to groups of investors, including individuals in the U.S without determining whether the tokens were accredited.\u00a0<\/p>\n All together, this constitutes \u201cmaterially false and misleading statements in connection with an unregistered offer and sale of digital asset securities,\u201d according to the SEC.<\/p>\n\n \u201cAs alleged, Sproule and Crowd Machine misled investors about how they were using ICO proceeds, spending funds on an entirely unrelated scheme,\u201d said Kristina Littman, Chief of the SEC Enforcement Division\u2019s Cyber Unit in a statement. \u201cWe will continue to hold accountable issuers of digital asset securities who fail to provide fulsome and truthful disclosure to the public.\u201d<\/p>\n\n\n The complaint orders Sproule to pay a $195,047 civil penalty. Without admitting or denying the allegations, Sproule and Crowd Machine have consented to judgments permanently enjoining them from violating these provisions and banning them from participating in future securities offerings. They also agreed to seek the removal of CMCT tokens from crypto trading platforms.<\/p>\n<\/div>\n !function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function() The Securities and Exchange Commission has charged Australian citizen Craig Sproule, as well as the two startups he founded, Crowd Machine, Inc. and Metavine, Inc, for misleading investors about how he is going to use the proceeds of a $41 million initial coin offering (ICO) back in 2018. The SEC\u2019s lawsuit, which was filed in […]<\/p>\n","protected":false},"author":1,"featured_media":4152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[39],"tags":[836,62,441,3246,605,1486],"class_list":["post-4151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ico","tag-charges","tag-crypto","tag-founder","tag-fraud","tag-sec","tag-startup"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2022\/01\/bitcoin-etf-bank-of-singapore-says-sec-under-gensler-may-alter-view-on-digital-currencies-as-us176-billion-sell-off-highlights-risks.jpg","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/4151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4151"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/4151\/revisions"}],"predecessor-version":[{"id":4153,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/4151\/revisions\/4153"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/4152"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4151"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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