The U.S. The Securities and Exchange Commission (SEC) has indicted an Australian citizen who referred to himself as the “man behind the machine” in a fraudulent crypto program that grossed nearly $ 41 million. He and his companies made “materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities.” The SEC on Thursday announced charges against Australian citizen Craig Sproule and two companies he founded for ” Investor Fraud ”. The two companies are Crowd Machine Inc. and Metavine Inc.

The SEC alleged they made “materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities.”

The Securities Commission stated that Sproule referred to himself as “Man behind the Machine” on social media posts. He claimed to have raised $ 40.7 million through an Initial Coin Offering (ICO) of Crowd Machine Compute Tokens (CMCTs). The offering took place between January and April 2018.

Crowd Machine and Sproule began redirecting more than $ 5.8 million in ICO proceeds to gold miners in South Africa – a use that was never disclosed to investors The Securities Guard also said that Crowd Machine and Sproule did not register their offers and sales of CMCT tokens. In addition, they knowingly sold the tokens without knowing if the investors were accredited.

Sproule and Crowd Machine misled investors about how they were using the ICO proceeds and spent funds on a completely independent program.

The SEC’s complaint “accuses Sproule and Crowd Machine of violating the anti-fraud and registration requirements of federal securities laws.”

The two defendants, Metavine Pty. Ltd., an Australian affiliate, has consented to judgments without admitting or denying the allegations.

They are prohibited from participating in future securities offers. Sproule is also prohibited from “serving as an officer or director of any public company and [convicted] from paying a civil fine of $ 195,047.” In addition, the CMCT tokens must be deactivated and removed from crypto trading platforms.

Kevin, a student of Austrian economics, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economy and cryptography.

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