SEC Triumphs in Court Ruling: Rivetz’s Ethereum-Based RvT Token Deemed Unregistered Security
The post SEC Triumphs in Court Ruling: Rivetz’s Ethereum-Based RvT Token Deemed Unregistered Security appeared on BitcoinEthereumNews.com.
The United States Securities and Exchange Commission (SEC) has recently secured another win against crypto-related companies. A Massachusetts federal judge adjudicated that Rivetz Corp and its CEO, Steven Sprague, unlawfully sold unregistered securities. Judge Mark Mastroianni’s ruling emphasized that Rivetz’s 2017 sale of Ethereum-based tokens violated US securities laws. SEC Scores Another Legal Victory in Crypto Realm: Rivetz’s 2017 Token Sale Deemed Unregistered Securities SEC’s Legal Standpoint on Rivetz’s Token Offering In an order dated September 30, Judge Mark Mastroianni declared that Rivetz’s token, RvT, sold in 2017 constituted unregistered securities. This ruling originated from the SEC’s 2021 lawsuit against Rivetz, which accused the company and its CEO of illicitly raising $18 million by selling RvT tokens to over 7,200 investors, a substantial fraction of whom were U.S.-based. The judgment reiterates the SEC’s assertion that Rivetz’s actions were tantamount to selling securities without adequate registration. Rivetz’s Defense and Judicial Interpretation Steven Sprague, who chose to self-represent, contested that the RvT token was a software product rather than an investment contract under the Howey Test. However, the court dismissed this defense, emphasizing that promotional statements tethered the token’s value to Rivetz’s goal of creating a mobile security ecosystem. This attachment to entrepreneurial efforts, as described by Judge Mastroianni, fulfilled criteria of the Howey Test, thereby classifying the tokens as securities. Impact of the Ruling and Historical Precedents Judge Mastroianni cited evidence indicating that RvT tokens were functional as ERC-20 tokens but lacked additional utilities or inherent value due to Rivetz’s incomplete security ecosystem. He further noted that token purchasers anticipated profits driven by Rivetz’s subsequent effort, reinforcing the characteristic of a security. This ruling is underlined by precedents, including a recent partial win by the SEC against Opporty International, enhancing its regulatory prowess over initial coin offerings (ICOs). Forthcoming Actions and…
Filed under: News - @ October 1, 2024 3:01 am