The SEC charged Rivetz over an alleged illegal securities offering that fetched around $18 million
The U.S. Securities and Exchange Commission (SEC) has charged Rivetz with operating an illegal and unregistered securities offering.
Source: SEC
SEC charges crypto startup Rivetz with illegal ICO
Rivetz was founded in 2015 to create a digital key management system based on trusted hardware. And the blockchain hardware company has allegedly generated $18 million through an unregistered securities offering from July to September 2017 from over 7,200 Investors.
Rivetz is now defunct. The company’s web presence seems to have ended sometime in 2020 when its website went offline. Its Twitter profile was last updated in September 2019.
According to the complaint on September 8, defendants Rivetz Corp., founder Steven Sprague, and the firm’s subsidiary Rivetz International were named. The ICO revolved around the RvT token, which the agency states was promoted and sold as an investment opportunity and used to capitalize on Rivetz’s business in building an app, ecosystem, and cyber security hardware.
Reportedly, Rivetz sold RvT to investors in the US and elsewhere through an ICO and was not registered with the SEC. The RvT sale raised $18 million in crypto from investors this way, and it boosted the RvT by promising future value and availability on exchanges.
“Token buyers could not purchase any goods and services using RvT tokens, and the tokens had no other use in any Rivetz product or service. Several months after the tokens were distributed […] Sprague stated on social media that Rivetz did not have a specific release date’ for the Rivetz app through which consumers could use the RvT token”, the SEC stated.
The SEC went on to criticize RVT’s lack of utility. They assert that the defendants touted the value of RvT tokens as investments that purchasers could buy and sell on the secondary market despite the product being not operational at the time of offering.
At that time, investors used ETH to buy RvT. After the initial sale, the SEC alleges that Rivetz and Sprague liquidated all ETH received through Rivetz International. If the defendants are found guilty, the SEC is seeking injunctive relief, returning what it calls ill-gotten gains, prejudgment interest, and a civil penalty.
In other similar cases over the past few months, the regulator targeted Coinschedule and Loci. Recently, the SEC has been keeping an eye on Coinbase while the lawsuit against Ripple continues to drag on.
Read more:
- The SEC Had Threatened To Sue The Coinbase Exchange Over A Lending Feature
- The Real Reason Behind SEC’s Non-Compliance With Coinbase