On October 1, COINOTAG news reported, citing Cointelegraph, that the U.S. SEC secured a victory in the ICO-related case against Rivetz Corp and its CEO, Steven Sprague. A Massachusetts Federal Court Judge, Mark Mastroianni, ruled on September 30 in favor of the SEC. The court concurred with the SEC’s position that Sprague had issued Ethereum-based Rivetz (RvT) tokens to American citizens via Rivetz, which amounted to unregistered securities sales.
The SEC initiated legal action against the defunct blockchain hardware company and Sprague in September 2021, asserting that they had sold $18 million worth of Rivetz tokens to over 7,200 investors in 2017, with one-third of these investors located within the United States. Both the SEC and Sprague agreed on the fundamental facts of the case. However, Sprague (defending himself) argued that the token was a software product and not an investment contract as defined by the Howey test, which the SEC uses to identify securities. Nonetheless, the judge noted that from the initial ICO announcement to its conclusion, Rivetz and Sprague made statements to potential buyers that explicitly connected the value of RvT tokens to Rivetz’s objective of creating a secure mobile device ecosystem.