Washington, D.C.–(Newsfile Corp. – January 6, 2022) – 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. Instead, Crowd Machine and Sproule began diverting more than $5.8 million in ICO proceeds to gold mining entities in South Africa – a use that was never disclosed to investors.
The SEC also alleges that Crowd Machine and Sproule did not register their offers and sales of CMCT tokens with the Commission and knowingly sold CMCTs to “ICO pools”—groups of investors, including individuals in the U.S.—without determining whether the underlying investors were accredited.
“As alleged, Sproule and Crowd Machine misled investors about how they were using ICO proceeds, spending funds on an entirely unrelated scheme,” said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. “We will continue to hold accountable issuers of digital asset securities who fail to provide fulsome and truthful disclosure to the public.”
The SEC’s complaint, filed in the United States District Court for the Northern District of California, charges Sproule and Crowd Machine with violating the antifraud and…
