The U.S. Securities and Exchange Commission (SEC) has scored a victory in its ongoing crackdown on unregistered initial coin offerings (ICOs).
Massachusetts federal court judge Mark Mastroianni has ruled in favor of the SEC in a lawsuit against bankrupt blockchain hardware company Rivetz Corp and its CEO Steven Sprague.
The judge ruled that CEO Sprague sold unregistered securities through Rivetz by offering the Ethereum-based Rivetz-RvT token to US citizens.
The SEC filed a lawsuit against the bankrupt blockchain hardware firm and its CEO Steven Sprague in September 2021. The SEC alleged that the company and its CEO sold $18 million worth of Rivetz tokens to more than 7,200 investors in its 2017 ICO, a third of which was in the United States.
“The tokens were functional as ERC-20 tokens but had no additional use or intrinsic value because Rivetz did not yet have a functional security ecosystem,” Judge Mastroianni wrote.
The judge also noted that the value of RvT tokens depends on the company’s future efforts, saying that investors have an expectation of profit and that the token meets other conditions that define it as a security.
This decision follows the SEC’s recent partial victory against Opporty International in a similar case involving unregistered securities from a 2017 ICO.
*This is not investment advice.
