ICO Sued For Faking SEC Approval

On 11th October, 2018, the US Securities and Exchange Commission or the SEC has announced that it has managed to get an emergency court order to rein in a new ICO (initial coin offering) that was falsely claiming to have been green-lighted by the regulatory body. The statement indicated that the ICO’s initiator Reginald Buddy Ringgold had been allegedly making claims that the project had received the official seal of approval from the SEC. Blockvest LLC, which is the company concerned, as well as its founder Ringgold were reportedly using the SEC seal to advertise their ICO despite not having the requisite permissions. As the SEC statement detailed, this directly violates existing federal legislation. The company had been making the unfounded and baseless claim that this crypto fundraising scheme had the required licenses and came within the purview of regulatory control, adhering to regulations completely.

The SEC statement went on to detail how the company and its founder had misled a reputed accounting firm with regard to Blockvest’s credentials. In fact, even when they were sent a cease-and-desist notice by the National Futures Association (NFA) to prevent their usage of the NFA seal, they did not stop the falsification of facts. In June 2018, the company’s website carried a notice that they had received a “Reg A+ approval” from the SEC. The court has scheduled a hearing a week later, on the 18th of October and it will be held in the US District Court for the Southern District of California. The SEC is seeking stern action against the ICO that tried to fool investors by using a make-believe crypto regulation certificate and the SEC seal. The head of the Cyber Unit of SEC’s Enforcement Division, Robert Cohen commented :

“The SEC does not endorse investment products and investors should be highly skeptical of any claims suggesting otherwise.”

This is the second time that the SEC is moving the court and appealing to the judiciary to take care of issues in ICOs and crypto businesses. It has also been trying to subpoena ICOs and people allegedly connected with pump and dump scenarios.