The US SEC agency took action against the two companies and one person to run CMCTs in illegal ways.
United States Securities and Exchange Commission (SEC) is responsible to regulate and catch illicit crypto-associated activities. This agency is known for its strict action against the crypto Companies or against illicit activities, perhaps the agency has power on the spot and cash market of the US.
On 6 January, the US SEC Agency explained how a person and two companies were running digital assets-based tokens unfairly, and also they were misleading investors.
The whole game was going on with Craig Sproule and two companies that he founded to facilitate scam and fraud. The two companies are Crowd Machine Inc. and Metavine Inc.
According to the SEC Agency, this person and his company falsely represented his company and his work unrelated to his actual activities. And also he and his company sold unregistered securities-based tokens.
SEC also figured out that Sproule described himself as a “man behind the machine” on social media and also he claimed that he raised around $40.7 million through the ICO of CMCTs (Crowd Machine Compute Tokens). And those offerings took place in Q1 of 2018.
Agency also found that Sproule started to give funds to the gold mining entities in South Africa, which was totally against the rules because that was unrelated to the working system.
“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,” SEC stated
Regulators also noted that this person and his company never registered himself to offer Securities token sales.
Now this person will face a total fine of $195,047. And also in the future, this person will not work as a Director of any company. And also he will not be able to offer any kind of related token sale services or related things.
Read also: LCX exchange faced $6.8M loss, hot wallet compromise