Massachusetts federal court judge Mark Mastroianni agreed with the SEC’s arguments that the now-closed company Rivetz sold unregistered securities in 2017, offering RvT tokens created on the basis of Ethereum to US citizens.
The judge explained that during the ICO, Rivetz and Steven Sprague tied the value of RvT tokens to the creation of an ecosystem for the security of mobile devices. Thus, the company’s efforts have stimulated the demand for RvT. These ERC-20 tokens had no intrinsic value since Rivetz had not yet created a functional ecosystem. The rate of RvT was directly dependent on Sprague’s entrepreneurial efforts, Mastoianni noted.
Under the Howey test, which is used to determine whether an asset is a security, RvT’s owners expected a profit from the company’s efforts. This means that RvT belongs to the category of securities, Mastroianni concluded. The court ordered the SEC to negotiate with Sprague and then file a motion for injunctive relief and monetary penalties by October 22.
The regulator sued Rivetz in September 2021. The agency alleged that in 2017, the company’s management sold RvT tokens worth $18 million to more than 7,200 investors, a third of whom were in the United States. However, Sprague insisted that the token was a software product and not an investment contract.
Recently, the American regulator won a case against Green United. The Utah District Court ruled that mining devices called Green Boxes were investment contracts.
Source: Bits
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