The California court has ordered Crowd Machine and Metavine, the company that issued Crowd Machine Compute Tokens (CMCT), to pay over $20 million in disgorgement, interest, and penalties in a case that started more than two years ago.
In January 2022, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Craig Sproule, the founder of the company CMCT.
The SEC claimed that the initial coin offering (ICO) for CMCT, which took place in 2018, was an unregistered securities sale and a fraudulent one. Craig Sproule was found liable for his involvement in the matter.
CMCT was developed to refund computer owners for using their computing power and pay programmers for writing code, but the tokens never became operational.
Sproule was ordered to close down CMCT and remove it from the one cryptocurrency exchange on which it was listed, along with a $195,047 fine. The accused did not acknowledge or refute any misconduct.
On January 17, the District Court of Northern California issued an amended final judgment, which ordered the defendants to disgorge $19,676,401.27 and pay $3.4 million in prejudgment interest.
Furthermore, Metavine was found to be responsible for $5 million of the total disgorgement. In addition, the court imposed a $600,000 civil penalty on the defendants.
“The prior consent judgments fully resolved the SEC’s action against Mr. Sproule, but left the Court to determine the monetary relief to be paid by the remaining defendants,” stated the SEC in a January 24 statement.