The United States Securities and Exchange Commission (SEC) has achieved another legal victory in its ongoing crackdown on unregistered initial coin offerings (ICOs). In a recent court ruling, the SEC successfully argued that Rivetz Corp and its CEO, Steven Sprague, violated securities laws by selling unregistered tokens.
The SEC filed a lawsuit against Rivetz Corp and Sprague in 2021, alleging that they had raised $18 million through the sale of Rivetz tokens (RVT) to US investors. The SEC argued that these tokens constituted securities under US law.
Sprague, representing himself, defended against the SECâs allegations, claiming that RVT tokens were software products and not securities. He argued that the tokens did not meet the criteria of the Howey test, which is used to determine whether an asset is a security.
The court rejected Spragueâs defense, finding that the RVT tokens met the criteria of the Howey test. The judge determined that the value of the tokens was dependent on the efforts of Rivetz Corp and that investors expected to profit from those efforts.
The SECâs victory in this case is a significant development in the ongoing legal battle against unregistered ICOs. It reaffirms the SECâs authority to regulate digital assets and sends a clear message to companies operating in the cryptocurrency space.
The SEC has also been involved in other legal actions against cryptocurrency companies. In September 2024, the SEC partially won a case against Opporty International, another firm accused of selling unregistered securities.
The SECâs successful prosecution of Rivetz Corp highlights the importance of compliance with securities laws in the cryptocurrency industry. As the regulatory landscape continues to evolve, it is essential for companies operating in this space to understand and adhere to applicable laws and regulations