U.S. Judge Sides With SEC in Case Against Crypto Wallet Rivetz Over Sale of Unregistered Securities

A United States District Judge has sided with the U.S. Securities and Exchange Commission (SEC) in a case where the regulator is alleging that the mobile crypto wallet Rivetz sold unregistered securities, a court document showed on Monday.

Judge Mark Mastroianni granted the SEC’s motion for summary judgement, a decision based on evidence made without going to trial.

“The SEC shall confer with Sprague [Steven Sprague, CEO of Rivetz] and file a proposed judgment for injunctive and monetary relief on or before October 22, 2024,” Mastroianni said. “Sprague shall file any objections to the proposed judgment on or before November 5, 2024.”

The SEC filed this action against now defunct crypto firm Rivetz in 2021, alleging that they offered unregistered securities and violated the securities act when they conducted a $18 million initial coin offering (ICO) in 2017 for the Rivetz token. ICO’s are a way for crypto companies to raise money for early stage crypto projects and offer incentives.

“The undisputed facts here clearly establish that Sprague personally promoted the ICO in the United States and knew that no registration statement was filed prior to the ICO,” the SEC filing said.

Many crypto firms have been sued by the SEC in recent years.

In August, a federal judge ruled that Ripple should pay $125 million after finding that the company violated federal securities laws with its direct sales of XRP to institutional clients, a fraction of the $2 billion that the SEC initially sought.

The SEC also brought an enforcement action against crypto exchange Coinbase (COIN) and alleged that Coinbase “intermediated transactions in crypto securities on its trading platform,” and the court sided with the SEC according to a filing in March. In 2023, the SEC also sued another large exchange, Binance, for violating securities laws.