The District Court of Northern California issued a final decision against crypto companies Crowd Machine and Metavine, ordering them to return funds raised during the ICO to investors and pay large fines.

The litigation began in January 2022 when the US Securities and Exchange Commission (SEC) filed a lawsuit against Craig Sproule, accusing him of illegally conducting an initial coin offering (ICO) in 2018. The regulator claims that CMCT tokens are unregistered securities. The SEC also accused Sproul of misusing funds and losing $5.8 million of the $33 million raised during the ICO.

It was assumed that with the help of CMCT tokens, computer owners would be compensated for the costs of using their computing power, and programmers would receive a reward for writing code. However, the tokens were never implemented.

The court ordered the defendant, the issuer of Crowd Machine (CMCT) tokens, to return $19.6 million in illegally obtained investors and pay $3.4 million in interest for the period before the judgment. In addition, the Metavine platform, owned by Sproul and involved in the case, is also held accountable. Metavine must pay back $5 million. The court also ordered each defendant in the case to pay an administrative fine of $600,000. In early January, Metavine filed for bankruptcy, which could prolong the trial.

Let us recall that the SEC previously fined the cryptocurrency project Thor Technologies $574,000 for unregistered ICO, and the BlackRock company $2.5 million for providing inaccurate information.