Public Company’s Crypto Claims Draw SEC Scrutiny

| Publish date: 10/23/2018
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In the latest cryptocurrency news, the U.S. Securities and Trading Commission (SEC) has suspended the trading of shares for a company which claimed to be offering an initial coin offering (ICO). Apparently, official reports suggest that the latter was registered with the regulator.

Inaccurate Claims

The SEC said that it had suspended trading in the American Retail Group, otherwise known as Simex, Inc. The decision was made after the company claimed in August that it was partnering with an SEC-qualified custodian to support cryptocurrency transactions. Moreover, the company was offering a token sale which it claimed was “officially registered in accordance [with] SEC requirements.”

Neither of these claims is accurate, the SEC said, with the Enforcement Division Cyber Unit’s chief, Robert Cohen, adding in a statement that “the SEC does not endorse or qualify custodians for cryptocurrency.”

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He also recommended that investors “use vigilance when considering an investment in an initial coin offering.” This is the second action the SEC has taken against a company claiming to have the regulator’s approval this month.

On October 11, the agency announced it had obtained an emergency court order against BlockVest and its proprietor, Reginald Buddy Ringgold, after the two used the SEC’s seal to indicate their ICO was registered with the regulator. At the time, Cohen noted that the SEC “does not endorse investment products.”

Illegal Use Of SEC Seal

By essence, Ringgold allegedly claimed that the ICO was given the green light by regulators. He and BlockVest, the agency, “were using the SEC seal without permission, a violation of federal law, and falsely claiming their crypto fund was ‘licensed and regulated.'”

“Blockvest and Ringgold also allegedly misrepresented Blockvest’s connections to a well-known accounting firm, and continued their fraudulent conduct even after the National Futures Association (NFA) sent them a cease-and-desist letter to stop them from using the NFA’s seal and from making false claims about their status with that organization,” the SEC said in a statement.

In June, BlockVest’s website referred to “receiving Reg A+ approval from the SEC,” and in April had filed with the agency for an exempted sale of $100 million worth of “BLV tokens,” public records show.

“We allege that this ICO is using both the SEC seal and a made-up crypto regulatory authority to trick investors into believing the ICO was approved by regulators,” Robert Cohen, who leads the SEC Enforcement Division’s Cyber Unit.

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