SEC Stops Blockvest and Ringgold ICOs For Falsely Claiming They Have SEC Approval
The U.S. Securities and Exchange Commission (SEC) has stopped the Blockvest LLC Initial Coin Offering from proceeding following ICO’s organizers falsely claiming that they had secured SEC approval.
Suspension of token sale due to misrepresentation
The U.S regulator published the news regarding the suspension of the planned token sale via an official press release issued on October 11.
According to the agency’s statement, an emergency court order gave it the mandate to suspend the ICO project, including the affected company’s ICO pre-sale.
The SEC issued an order halting Blockvest LLC’s ICO activities, which also included an injunction on its founder Reginald Buddy Ringgold III.
SEC’s complaint was that Blockvest, in promoting the project, falsely claimed that the ICO and its affiliates had the approval of key agencies, including the SEC.
Furthermore, Blockvest and Ringgold, also known as Rasool Abdul Rahim El, purportedly advertised the crypto fund as being “licensed and regulated.”
The regulatory watchdog also accuses the firm of violating federal laws by using the agency’s seal in a clear case of impersonation.
Ringgold allegedly behind fake “Blockchain Exchange Commission”
Another complaint against the firm says that its founder Ringold had created a fake agency under the misleading “Blockchain Exchange Commission,” complete with a graphic resembling the SEC seal.
He also apparently gave his “fake agency” the same address as that of the SEC, and used these false claims to promote the ICO.
The long list of complaints also includes that of violating the law by impersonating the National Futures Association (NFA) by using its seal and continuing their fraudulent activities even after the NFA issued them with a cease-and-desist letter.
Blockvest and Ringgold also sought to trick investors by misrepresenting their connections, including attempts to “trick investors into believing regulators approved the ICO.”
Court date set for October 8
SEC’s complaints against the firm and its founder led the U.S. District Court for the Southern District of California to issue an order allowing authorities to freeze Blockvest and Ringgold’s funds immediately.
The court has also prohibited Blockvest and its founder from engaging in the further violation of antifraud and securities registration provisions.
The case will be heard on October 18, when the prosecution will look for a prolonged injunction as well as the continuation of the asset freeze. The SEC also seeks the return of all ill-gotten assets and a ban on Ringgold from carrying out any future trading of securities.
Cases of fraud within the ICO and crypto industry are not new, with both the SEC and the U.S. Commodity Futures Trading Commission (CFTC) cautioning the public and investors to be on guard against fraudulent projects.
The prevalence of fraudulent cases saw the SEC, through its Office of Investor Education and Advocacy launch a “fake ICO website,” with the intention of increasing public awareness, and outlining potential red flags that could warm investors of fraudsters and potential ICO scams.
The agency hoped to improve on investor education and has on numerous occasions informed the public that it does not endorse any investment projects. The CFTC offers a similar caution and recently charged two companies for forgery, impersonation, and fraud.