The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Australian Craig Derel Sproule on the grounds that his company was involved in a “fraudulent and unregistered” sale of “digital asset securities” in an initial coin offering in 2018.

The SEC stated in a statement on January 6 complain Sproule’s company Metavine, Inc. is Crowd machine (CMCT) From January to April 2018, it sold unregistered securities, never put the project into operation, and “seriously misrepresented how it intends to use ICO proceeds.”

The US Securities and Exchange Commission stated that Sproule has raised a total of at least 33 million US dollars, but he now lacks “sufficient funds to fund continued operations.” The reason for his lack of funds is the core of the US Securities and Exchange Commission case.

January 6 announcement Information from the US Securities and Exchange Commission on the case indicated that Sproule agreed to prohibit him, Crowd Machine, and Metavine from issuing any more securities. They must also “permanently disable the CMCT token and seek to remove it from the digital asset trading platform”. According to CoinGecko, CMCT is currently only available for trading on HitBTC.

Sproule was barred from becoming an executive of a public company and ordered to pay a fine of $195,047.

Although Sproule told investors that ICO proceeds will be used to fund the development of a decentralized peer-to-peer network, the complaint stated that $5.8 million in ICO funds were sent to South African mining companies as loans or equity. So far, these funds have not been recovered, and Sproule has not received a return on investment.

The complaint also detailed how CMCT tokens should operate in the Crowd Computer ecosystem to pay for equipment owners to use their computer capabilities and to pay for software developers to write code. However, tokens have never run in the ecosystem.

The US Securities and Exchange Commission claimed that CMCT was an investment contract and was classified as a security, and that Crowd Computer and Metavine failed to register its sale with the commission:

“Many courts have clearly determined that the provision and sale of digital assets such as CMCT are investment contracts. Therefore, according to the Federal Securities Law, such digital assets are “securities.”

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