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The U.S. Securities and Exchange Commission (SEC) accused an Australian citizen of calling himself “the man behind the machine” in a fraudulent encryption scheme that raised nearly $41 million. He and his company made “major false and misleading statements related to the offer and sale of unregistered digital asset securities.”
The SEC accuses “the man behind the machine”
The US Securities and Exchange Commission announced on Thursday that it had filed allegations of “fraudulent investors” against Australian citizen Craig Sproule and the two companies he founded. The two companies are Crowd Machine Inc. and Metavine Inc.
U.S. Securities and Exchange Commission Allegedly They made “major false and misleading statements related to the offer and sale of unregistered digital asset securities”.
The securities regulator explained that Sproule referred to himself as “the man behind the machine” in social media posts. He claims to have raised $40.7 million through the initial coin offering (ICO) of Crowd Machine Compute Tokens (CMCT). The release took place between January and April 2018.
The SEC did not use the ICO proceeds for the purpose he told investors, but described:
Crowd Machine and Sproule began to transfer more than $5.8 million in ICO proceeds to South African gold mining entities-a use that has never been disclosed to investors.
The securities regulator also stated that Crowd Machine and Sproule did not register their quotations and sales of CMCT tokens. In addition, they deliberately sell tokens without knowing whether investors are approved.
Kristina Littman, head of the SEC’s law enforcement network department, commented:
Sproule and Crowd Machine misled investors about how they used ICO proceeds and used the funds for an entirely unrelated plan.
The SEC’s complaint “accuses Sproule and Crowd Machine of violating the anti-fraud and registration provisions of the Federal Securities Act.”
The two and relief defendants Metavine Pty. Ltd., an affiliated Australian entity, agreed to the verdict without admitting or denying the allegations.
They are prohibited from participating in future securities issuances. Sproule is also prohibited from “serving as an officer or director of a listed company, and [will be ordered] Pay a civil penalty of US$195,047. “In addition, CMCT tokens must be disabled and removed from the crypto trading platform.
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