The United States Securities and Exchange Commission (SEC) seems to have nailed another culprit that conducted the 2017 Initial Coin Offering without prior registration.

SEC’s complaint is against Rivetz Corp., Rivetz International SEZC, and the founder of Rivetz, Steven K. Sprague.

Rivetz’s Unregistered Tokens

SEC claims the three entities sold digital assets dubbed “RvT tokens” to US investors and the general public, in an attempt to capitalize on Rivetz’s business. The act, according to financial compliance watchdog SEC, was an unregistered security offering. 

SEC’s suit against Sprague and the company specifies that Rivetz sold $18 million worth of the RvT tokens between July and September 2017. Fronted as an investment opportunity, Sprague and company advertised to buyers that it was building a “Global Attestation and Identity Network.” 

The company went on to sell the tokens to more than 7,200 investors using a Cayman Islands affiliate. Of these investors, 30% were US residents. 

SEC has been on the hunt for offenders of the ICO boom of 2017 and 2018. Rivetz and its founder Steven K. Sprague are the latest on its list. SEC’s complaint claims Rivetz has cashed out all the earning from the ICO by March 2018.

Sprague’s Involvement in the ICO 

Financial compliance watchdog SEC expounded on Sprague’s role in the crime. Sprague collected a $1,000,000 one-time bonus from Rivetz after the ICO offering. He then loaned himself $2,500,000 from Rivetz. The funds were allegedly used to buy a house in the Cayman Islands. Sprague went on to lease the said house back to Rivetz International SEZC. Following this trail, SEC is going after all of the three parties. 

SEC’s suit against Sprague and company is demanding for the return all the funds that they acquired from the ICO. It also wants the accused to be charged a penalty on top of these funds. However, SEC is yet to reveal a specific figure it requires from the entities.