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- The U.S. Securities and Exchange Commission or SEC, has alleged an Australian man who goes by the name “Man behind the Machine” in his social media, of participating in a fraudulent crypto scam that raised about $41 million.
- Craig Sproule, the accused, and his two companies, Crowd Machine Inc. and Metavine Inc, in connection with an unregistered offer and sale of digital asset securities, made substantially false and misleading statements.
- The SEC further disclosed, the companies didn’t even register the offers and sales of CMCT tokens. In addition, they sold the tokens without even checking whether or not the investors were accredited.
The SEC in an announcement on Thursday declared the charges against Craig Sproule, an Australian citizen, who falsely established companies to fraud investors. Crowd Machine Inc. and Metavine Inc. are the two companies.
SEC accusing founders in connection with an unregistered offer and sale of digital assets securities said that the statements made by founders were misleading and materially false.
The SEC also explained that the regulator has referred to him as the “Man behind the Machine.”
The accused in an initial coin offering (ICO) of Crowd Machine Compute Tokens (CMCTs) has claimed to raise $40.7 million. The offering was held between January and April 2018.
The SEC also disclosed that instead of the purpose he informed investors of, Sproule invested $5.8 million in ICO proceeds in gold mining entities in South Africa.
Revealing, the security commission also said that Crowd Machine and Sproule did not register the offers and sales of CMCT tokens. Furthermore, the tokens were sold without even first consenting investors whether they are accredited.
The chief of the SEC Enforcement Division’s Cyber Unit, Kristina Littman speaking on the situation said that the founders of the two companies misled investors regarding the use of ICO proceeds.
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The complaint by the security watchdog charged Sproule and his company, Crowd Machine with breaching the anti-fraud and registration provisions of the federal securities laws.
The two companies along with Metavine Pty. Ltd, relief defendant, and an affiliated Australian entity, nor denied or admitted the allegations, but consented to the judgments of the SEC.
The two firms are further prohibited from taking part in future securities offerings. In addition, Sproule has also been forbidden to serve as an officer or director of a public company and is charged with a $195,047 civil penalty. In addition, the SEC further ordered the removal of the CMCT tokens from crypto trading platforms.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
