The U.S. SEC Wins a Case Against Rivetz, a Crypto Company That Raised $18M Through an ICO

The court ruled in favor of the SEC, allowing them to proceed without a trial. This decision confirms that Rivetz violated the law by selling securities without proper registration.

The U.S. Securities and Exchange Commission (SEC) has achieved a significant legal victory in its case against Rivetz, a crypto company that raised $18 million in 2017 through an initial coin offering (ICO).

The court has granted summary judgment in favor of the SEC, allowing the Commission to proceed without a trial in its case against Rivetz. This decision confirms the court’s finding that Rivetz violated the law by selling securities without proper registration.

The SEC had filed a complaint against Rivetz in 2021, alleging that the company failed to comply with the Securities Act’s requirements when conducting its ICO.

Following this decision, the SEC and Rivetz’s CEO, Steven Sprague, will work together to determine the penalties, which may include fines and restrictions, by October 22, 2024.

RIVETZ BACKGROUND

Rivetz was a cryptocurrency company that focused on enhancing security for digital devices, such as smartphones and computers. The company aimed to ensure the safe storage and usage of digital assets, including cryptocurrencies.

In 2017, Rivetz undertook a fundraising effort by selling digital tokens in an initial coin offering (ICO). This method has become a popular avenue for companies to secure investment through cryptocurrency.

However, Rivetz encountered legal troubles for not adhering to the necessary regulations in the sale of these tokens, leading to the SEC case.

SEC’S ROLE IN CRYPTO REGULATION

The U.S. Securities and Exchange Commission (SEC) has undertaken a verstärkte role in regulating and enforcing the cryptocurrency industry.

A primary aim of the SEC is to protect investors by ensuring that crypto firms adhere to the same rules as traditional financial markets.

One method employed by the SEC is targeting companies that conduct Initial Coin Offerings (ICOs) without proper registration. ICOs are considered akin to selling stocks and, as such, require regulation. When companies fail to comply, as in the case of Rivetz, the SEC takes legal action.

In addition, the SEC actively pursues firms that offer cryptocurrency products or tokens that act like securities but don't follow proper regulations, often leading to lawsuits, fines, or, in some instances, the closure of the company.

Another significant focus for the SEC is combating fraud and scams in the crypto world, including Ponzi schemes and companies that mislead investors about their products.

Through these actions, the SEC aims to bring more clarity and fairness to the cryptocurrency market.