The United States Securities and Exchange Commission (SEC) continues with its efforts to clamp down on illegal initial coin offerings. This trend started a couple of years back when ICOs were at their prime but has steadily escalated in 2020 and 2021.
SEC Charges Rivetz Corp CEO for $18 Million
According to an official litigation release, the SEC has charged Rivetz Corp., Rivetz International SEZC, as well as the president of Rivetz and the CEO of Rivetz International – Steven K. Sprague. The Commission alleges that the companies have conducted an illegal and unregistered offering of securities through an initial coin offering.
The complaint reads that between July and September 2017 (when ICOs started to gain a lot of steam), the defendants offered and sold digital assets called RvT tokens to the public, which included investors from the US.
The filing further alleges that the CEO had marketed RvT as an investment opportunity by promoting its value to investors. He managed to raise the equivalent of $18 million in tokens.
The problem – the offering hadn’t been registered with the SEC, and it did not qualify for an exemption.
Another One Bites The Dust
This is far from being the first ICO that was deemed illegal by the SEC. Throughout the past couple of years, we saw a multitude of them brought to charges because of the same thing – they failed to abide by US securities regulations despite attracting investors from the country.
Moreover, the breach is almost always the same – a failure to register the offering with the SEC as well as a lack of an exemption to do so.
However, it’s also worth noting that back in 2020, the US Supreme Court restricted the Commission’s power to seek penalties against ICOs. Although, some experts claim that the court’s decision is actually in favor of the SEC despite the reduction in its disgorgement powers and that it’s preferable to the total wipeout of its ability to seek fines and penalties.