What you quote is the license.
This is a custom, informal, non-free license.
The first sentence says:
MS Captcha is free to use in any kind of projects.
It says that you can use this software in other software projects, without restrictions on what kind of project it is used for.
Please note that no other rights than the right to use is licensed.
The second and last sentence says:
The software is licensed, not sold.
This is ambiguous. It may just mean that you can go ahead and download the software without paying a fee, or it may impose a non-commercial restriction on use, meaning: "you are not allowed to sell this software". Because the license is unclear on this point, I would strongly advice against selling a product where you use this software.
Is this a free software license? For example: Does it allow you to fork the project by changing the code and making the result publicly available.
Unfortunately, no. This permission to do this is not given in the license. This means that default copyright law (that makes creating adaptations a reserved right) apply.
I doubt that the intent of the author is to make this a non-free license. But since the right to adapt is not explicitly mentioned in the license, this right is technically still reserved, imposing a legal hazard (i.e. you have no guarantee that this omission is unintentional) on users if they choose to treat this as a free software license.
What would be the equivalent of this statement in terms of the existing Open Source licenses out there?
Since this license grants the user almost no freedoms, it cannot be compared to, or expressed in the terms of, existing Open Source licenses.
Personally, I would not even think about using code that are licensed under such unclear, ambiguous terms in any project of mine. YMMV.