The Securities and Exchange Commission has suspended the next fraudulent placement of coins, claiming that Blockvest ICO’s operators not only violated a number of securities laws but misled investors by claiming that they received permission from a US regulator. According to the court decision, all Blockvest assets were frozen, and their activities were suspended due to suspicions of fraud.
According to SEC, Blockvest LLC and its founder, Reginald Ringgold, misled investors by pointing out false information about partners and the legal status of the company. In particular, to promote his own ICO, Ringgold made statements about cooperation with several large companies and regulators, including the SEC.
In addition, Ringgold, whose real name is Rasul Abdul Rahim El, distorted information about the types of products and services provided by his company, fabricated customer reviews and comments, and also invented his own non-existent agency, the Blockchain Exchange Commission, to promote ICO. The emblem of his “BEC” almost completely coincides with the SEC logo.
Blockvest was advertised as a decentralized cryptocurrency exchange of a new generation, as well as an index fund that tracks the top 30 cryptocurrencies. According to the SEC, the company’s offer is contrary to the law on securities, because the tokens of exchanges are considered as securities, which means the company must register as a broker-dealer.
The regulatory status of the ICO is still quite uncertain. Despite this, the SEC warned that securities laws could apply to some virtual tokens, depending on their characteristics. In these cases, companies need to register, disclose information, and fulfill other requirements.
Earlier this year, the SEC Office of Education and Advocacy (Office of Investor Education and Advocacy) created a fake ICO, whose website advertises the offer “too good to be true.” According to the regulator, such schemes bring profit to many cryptocurrency fraudsters in other markets.