The US-based SEC has charged one Craig Sproule, from Australia, and his two companies – Crowd Machine and Metavine – for conducting fraudulent activities and raising $40.7 million via illicit ICOs. The official announcement revealed that the Initial Coin Offerings funds were raised between January and April of 2018.
Charges filed at a Californian court reveal that Sproule lied to users about the offered ICO, which also turned out to be unregistered. He lied to users when he promised them that their money will be used to develop new tech for Metavine that would allow the platform to function on a decentralized network for users’ own personal use.
The Australian culprit diverted $5.8 million from his investors to a gold mining operation in South Africa, without telling his clients so. He also sold the unregistered ICOs to US-based investors of which nothing is known through an ICO pool.
Sprouse and his firms were charged with violating antifraud and registration provisions of federal securities laws. The culprit was ordered to seize the issuance of the ICOs and to remove them from the exchange altogether. The Aussie was finally forced to pay a penalty amounting to $195 047. Authorities are yet to determine when Crowd Machine is to pay back its victims, while penalties for the firms are also on the waiting list.