SEC Charges ICO Issuer and Founder with Defrauding Investors

The Securities and Exchange Commission today announced charges against Australian citizen Craig Sproule and two companies he founded, Crowd Machine, Inc. and Metavine, Inc., for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities. According to the SEC’s complaint, Sproule, who referred to himself in social media postings as the “Man behind the Machine,” claimed to have raised $40.7 million through his companies, collectively referred to as “Crowd Machine,” in an initial coin offering of Crowd Machine Compute Tokens (CMCTs). In this offering, which occurred between January and April 2018, Sproule told investors that the ICO proceeds would be used to develop a new technology that would enable Metavine, Inc.’s existing application-development software to run on a decentralized network of users’ own computers.