PANews reported on October 1 that according to Cointelegraph, the U.S. SEC won a lawsuit against the defunct crypto company Rivetz Corp and its CEO Steven Sprague. Massachusetts federal court judge Mark Mastroianni agreed with the U.S. SEC's opinion that Sprague sold unregistered securities by providing Ethereum-based Rivetz or RvT tokens to U.S. individuals through Rivetz. The regulator sued the defunct blockchain hardware company and Sprague in September 2021, accusing them of selling $18 million worth of Rivetz tokens to more than 7,200 investors in 2017, one-third of which were in the United States.
Neither the SEC nor Sprague disputed the material facts of the case, but Sprague (representing itself) claimed that the token was a software product, not an investment contract under the Howey test, the definition of a security as alleged by the SEC. But the judge claimed that from the first announcement of the ICO until its completion, Rivetz and Sprague made statements to potential purchasers that explicitly tied the value of the RvT token to Rivetz's goal of creating a secure ecosystem for mobile devices.