The U.S. Securities and Exchange Commission (SEC) has terminated a pre-planned Initial Coin Offering (ICO) for not obtaining an SEC approval- the agency reported in a press release Oct. 11.
The SEC suspended the ICO project based on an emergency court order, halting the pre-ICO sales by the company Blockvest LLC, in addition to its founder Reginald Buddy Ringgold III.
“An SEC complaint unsealed yesterday alleges that Blockvest falsely claimed its ICO and its affiliates received regulatory approval from various agencies, including the SEC. According to the SEC’s complaint, Blockvest and Ringgold, who also goes by the name Rasool Abdul Rahim El, were using the SEC seal without permission, a violation of federal law, and falsely claiming their crypto fund was “licensed and regulated.” The 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.”, the press release on SEC’s official website read.
“Violating federal law by impersonating the SEC seal”, was the headline of the accusation the company was charged with, besides running an ICO promoted by a fake agency dubbed the “Blockchain Exchange Commission.”.
The fake company also used a graphic similar to the SEC seal, along with including the SEC address.
Blockvest and Ringgold also violated the law –as per SEC- by continuing their fraudulent activity after National Futures Association (NFA) issued them a “cease-and-desist letter”.
…. And Southern District of California Freezes Their Funds
In its turn, the U.S. District Court for the Southern District of California followed the SEC decision and issued an order freezing Blockvest and Ringgold’s funds, along with suspending their securities registration provisions.
The court hearing is reportedly set to take place on Oct. 18, and will consider prolonging the preliminary injunction and the freezing the asset.
It is mentioned also that other companies attempted to defraud investors via fake claims about their status with federal regulators.
On Sept. 28, the U.S. Commodity Futures Trading Commission (CFTC) had filed a suit against two companies for “fraudulent solicitation of Bitcoin (BTC)”.
The companies were reportedly impersonating a CFTC investigator, as well as using forged official documents to appear as the CFTC’s General Counsel with the CFTC’s official Seal.