An American court has put a stop to an initial coin offering (ICO) by a company claiming to offer “the first licensed and regulated tokenized crypto currency exchange & index fund based in the US.” The ICO promoters even invented their own regulatory authority, which seems to have really irked the regulators.
The Securities and Exchange Commission (SEC) has announced on Thursday that it has obtained an emergency court order halting a planned ICO by Blockvest. The Southern California District Court order also stopped an ongoing pre-ICO sale by the company and its founder, Reginald Buddy Ringgold, III, as well as freezing the defendants’ assets.
According to the ICO’s website, Blockvest (BLV) is an ERC20 token based upon Ethereum. “Blockvest Nvestnodes generate passive income through asset backed profit sharing smart contracts. At it’s core, BLV is a security token that’s representative of the top performing cryptocurrency index.”
According to the SEC’s complaint, Blockvest and Ringgold, who also goes by the name Rasool Abdul Rahim El, were falsely claiming their crypto fund was “licensed and regulated.” Blockvest and Ringgold also allegedly misrepresented Blockvest’s connections to an accounting firm.
The Blockchain Exchange Commission
The SEC complaint also alleges Ringgold promoted the ICO with a fake agency he created called the “Blockchain Exchange Commission,” using a graphic similar to the SEC’s seal and the same address as SEC headquarters.
“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,” said Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit. “The SEC does not endorse investment products and investors should be highly skeptical of any claims suggesting otherwise.”
A court hearing is scheduled for Oct. 18, 2018. The SEC will ask for injunctions, return of ill-gotten gains plus interest and penalties, as well as a ban against Ringgold from participating in offering any securities in the future.
Would you rather trust the Securities and Exchange Commission or the Blockchain Exchange Commission? Share your thoughts in the comments section below.
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