SEC stops a fraudulent ICO that had claimed to have the regulator’s approval

The U.S financial watchdog, Securities and Exchange Commission (SEC), announced on Thursday it had given an emergency court order to stop an Initial Coin Offering (ICO) that had falsely claimed to have obtained its approval.

Through the emergency court order, the SEC suspended the Blockvest LLC led ICO project and its pre-ICO sales.

Fraudulent schemes

The SEC also claimed that under the leadership of Reginald Buddy Ringgold III (the company founder) Blockvest LLC had contravened the law by continuing with their fraudulent schemes even after they were served with a cease and desist letter by the National Futures Association (NFA).

According to the SEC complaint, Blockvest had fraudulently claimed that their ICO had obtained approval from main financial regulators in the country, including the SEC. The SEC noted:

Blockvest and Ringgold claim their ICO has been ‘registered’ and ‘approved’ by the SEC and other regulators, even going so far as to use the SEC’s seal to promote their offering. None of that is true: the SEC has in no way approved, authorised or otherwise endorsed defendants, their entities, nor their ICO. Defendants also claim they are ‘partnered’ with and ‘audited by’ Deloitte Touche Tohmatsu Limited (‘Deloitte’)-which they are not.

The ‘Blockchain Exchange Commission’

Blockvest came up with a fictitious agency dubbed the ‘Blockchain Exchange Commission’ (BEC), which they claimed were a part of the SEC. The BEC logo linked to the official website of the government agency.

Had the SEC not have acted swiftly to halt the Blockvest ICO, Rinngold would have made an appearance at an ICO conference in Los Angeles where he would have likely continued to market his token fraudulently.

More scams in the crypto community

Recently, there have been several attempts by individuals in the cryptocurrency space to circumvent the system by making spurious claims regarding their regulatory status with national financial regulators such as the SEC and CFTS. In connection to these developments, the SEC’s Office of Investor Education and Advocacy and the CFTS’s office of Customer Education and Outreach have issued a warning to investors regarding firms mushrooming with claims of endorsements by the SEC and CFTS.

Nicholas

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Nicholas is Nicholas is a prolific technology writer and cryptocurrency enthusiast. He has been writing professionally for the last 6 years, especially on emerging technology. His current focus is on blockchain technology and cryptocurrency. He has been working with several local and international clients over the years to produce dependable, well researched and updated industry content. He loves travelling and spending time with family in his free time.

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