The U.S. Securities and Exchange Commission (SEC) has charged the Australian entrepreneur Craig Sproule and his two crypto companies — Crowd Machine Inc. and Metavine Inc. — with defrauding investors.
In a Thursday statement, the SEC said that Sproule and Crowd Machine used more than $5.8 million in proceeds from an initial coin offering (ICO) offered between Jan. and Apr. 2018. The watchdogs alleged Sproule and his company of using the money to invest in gold mining entities in South Africa without disclosing the investment to investors.
The SEC added that Sproule promised investors to use the proceeds to develop a new technology that would help in the development of Metavine’s software to run a decentralized network of users’ own computers. He claimed to have raised $40.7 million through his companies in the ICO, according to the SEC.
The U.S. watchdogs also alleged Crowd Machine and Sproule of not registering their offerings and sales of Crowd Machine Compute Tokens (CMCT) properly. Additionally, Sproule sold the tokens to investors without validating the accreditation of the tokens.