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Breaking: SEC Charges Man Behind $40.7 Million ICO, Here's Why

Legal

coingape.com 07 January 2022 20:41, UTC
  
Reading time: ~3 m

The crypto world may have move past the ICO wave of 2017 but Securities & Exchange Commission (SEC) has not and SEC has charged issuers of a $40.7 Million ICO from 2018. As per a report published by SEC, Craig Sproule & his two companies are charged by SEC for unregistered offer and sales of digital asset securities.

From ICO to Gold Mines of South Africa

As reported by SEC, Sproule raised $40.7 by an Initial Coin Offering (ICO) of Crowd Machine Compute tokens (CMCT) between January 2018 to April 2018. Crowd Machine and Sproule later on started siphoning money from ICO proceedings to South African Gold Mining entities without disclosing it to ICO investors.

We charged Australian citizen Craig Sproule and two companies he founded for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities

— U.S. Securities and Exchange Commission (@SECGov) January 7, 2022

SEC estimates the diverted amount to be $5,8 Million which was originally promised to be used to build a new decentralized technology called Metavine. Chief of the SEC Enforcement Division’s Cyber Unit, Kristina Littman,

“We will continue to hold accountable issuers of digital asset securities who fail to provide fulsome and truthful disclosure to the public.”

This is not the first time SEC has charged ICO projects calling them unregistered digital asset securities. In 2019, SEC charged ICObox and its founder for sale of token worth whooping $665 Million dollars. SEC has also taken actions against celebrities like Mayweather for promoting ICO offerings.

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