ChainCatcher reported that the U.S. SEC won the lawsuit against Rivetz Corp and its CEO Steven Sprague in an ICO-related case. In an order on September 30, Massachusetts Federal Court Judge Mark Mastroianni agreed with the SEC's opinion that Sprague provided Ethereum-based Rivetz (RvT) tokens to the U.S. public through Rivetz, constituting charges of selling unregistered securities.
The SEC sued the defunct blockchain hardware company and Sprague in September 2021, alleging they sold $18 million worth of Rivetz tokens in 2017 to more than 7,200 investors, a third of whom were in the U.S. Neither the SEC nor Sprague disputed material facts in the case, but Sprague (representing itself) claimed that the token was a software product and not an investment contract under the SEC’s Howey test, which defines a security.
But the judge wrote, “From the time the ICO was first announced until its completion, Rivetz and Sprague made statements to potential purchasers that explicitly tied the value of the RvT tokens to Rivetz’s goal of creating a secure ecosystem for mobile devices.”