SEC charges Rivetz over an alleged illegal securities offering in which it raised over $18 million.

The United States Securities and Exchange Commission (SEC) has charged Rivetz over an alleged illegal securities offering that brought in $18 million. Rivetz was founded in 2013, and the now-defunct blockchain hardware firm has been accused of generating $18 million via an unregistered securities offering between July and September of 2017 from more than 7,200 investors. The financial watchdog has been tightening its grip on the crypto sector.

Complaint names defendants Rivetz Corp. and founder Steven Sprague.

The SEC’s complaint names defendants Rivetz Corp., founder Steven Sprague, and the firm’s subsidiary Rivetz International. The Initial Coin Offering (ICO) revolved around the RvT token, which the SEC 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. The SEC has claimed 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. 

Investors used Ether to purchase the RvT tokens.

The SEC said in its report, “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. In fact, 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.” Investors used Ether to purchase the RvT tokens. Following the initial sale, the SEC alleges that Rivetz and Sprague liquidated all of the Ether received via Rivetz International.