SEC Indicts Australian ‘Man Behind Machine’ In $ 41 Million Crypto Fraud Scheme – Bitcoin News Regulation
The SEC announced Thursday charges against Australian citizen Craig Sproule and two companies he founded for “defrauding Investors.” The two companies are Crowd Machine Inc. and Metavine Inc. ‘Man Behind the Machine’ Charged by SEC
The securities regulator explained that Sproule referred to himself in social media postings as the “Man behind the Machine.” He claimed to have raised $40.7 million in an initial coin offering (ICO) of Crowd Machine Compute Tokens (CMCTs). The offering occurred between January and April 2018.
The SEC alleged that they made “materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities.”
Instead of using the ICO proceeds for the purpose he told investors, the SEC described:
Crowd Machine and Sproule began diverting more than $5.8 million in ICO proceeds to gold mining entities in South Africa – a use that was never disclosed to investors.
The securities watchdog also said that Crowd Machine and Sproule did not register their offers and sales of CMCT tokens. In addition, they knowingly sold the tokens without determining whether the investors were accredited.
Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, commented:
The SEC’s complaint “charges Sproule and Crowd Machine with violating the antifraud and registration provisions of the federal securities laws.”
Sproule and Crowd Machine misled investors about how they were using ICO proceeds, spending funds on an entirely unrelated scheme.
The two and relief defendant Metavine Pty. Ltd., an affiliated Australian entity, consented to judgments without admitting or denying the allegations.
They are prohibited from participating in future securities offerings. Sproule is also prohibited “from serving as an officer or director of a public company, and to pay a $195,047 civil penalty.” Furthermore, the CMCT tokens must be disabled and removed from crypto trading platforms.
Tags in this story
Australian citizen, CMCT, CMCT ICO, CMCT offering, Craig Sproule, crowd machine, defrauding investors, Gold Mining, ICO, initial coin offering, man behind the machine, metavine, SEC, Securities offering, South Africa, token offering
What do you think about this case? Let us know in the comments section below.
Kevin Helms
Image Credits: Shutterstock, Pixabay, Wiki Commons
More Popular NewsIn Case You Missed It
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
News Highlights Business
- SEC Indicts Australian ‘Man Behind Machine’ In $ 41 Million Crypto Fraud Scheme – Bitcoin News Regulation
- Check all news and articles from the Business news updates.
Original Source