Rivetz is a now-defunct blockchain company. It raised $18 million through an ICO by selling Rivetz (RvT) tokens.
The Securities and Exchange Commission (SEC) has secured a victory in a legal battle against Rivetz Corp and its CEO, over an Initial Coin Offering (ICO) conducted in 2017. The SEC had accused Rivetz of selling unregistered securities through the ICO.
The court ruled that the RvT tokens offered by Rivetz were indeed unregistered securities, and that CEO Steven Sprague had failed to register the ICO with the SEC before launching it. Judge Mark Mastroianni, who presided over the case, agreed with the SEC's claims.
Sprague had maintained that the tokens were software products and not securities, but Judge Mastroianni asserted that the value of the tokens was "entangled with the success of Rivetz's enterprise," which made them a security under the Howey test.
The court has now directed the SEC and Sprague to submit a proposed judgment, including any penalties and other relief, by October 22, 2024. Sprague will have until November 5, 2024, to file any objections to the proposed judgment.
This case marks another step in the SEC's ongoing efforts to regulate the crypto space. In recent years, the SEC has filed suits against various crypto companies, including Coinbase and Binance, alleging that they facilitated the trading of unregistered securities.
The case against Rivetz reinforces the SEC's stance that many ICOs do involve securities and must comply with federal laws.
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