Blockvest falsely claimed its ICO and its affiliates had regulatory approval from various agencies, including the SEC.
The United States authorities continue their efforts to stop cryptocurrency-related scams. The Securities and Exchange Commission (SEC) announces that it has obtained an emergency court order stopping a planned initial coin offering (ICO), whose backers falsely proclaimed that it was approved by several agencies, including the SEC.
In addition, the order, issued by the US District Court for the Southern District of California, halts ongoing pre-ICO sales by the company, Blockvest LLC and its founder, Reginald Buddy Ringgold, III.
The SEC’s complaint unsealed yesterday alleges that Blockvest falsely claimed its ICO and its affiliates had regulatory approval from various agencies. The complaint further says that Blockvest and Ringgold, who also goes by the name Rasool Abdul Rahim El, were using the SEC seal without permission, thus committing a violation of federal law. 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.
Blockvest and Ringgold continued their fraudulent conduct even after the National Futures Association (NFA) sent them a cease-and-desist letter to stop them from using the NFA’s seal and from making false claims about their status with that organization.
The Honorable Gonzalo P. Curiel, Judge of the U.S. District Court for the Southern District of California, also issued an order freezing defendants’ assets and other emergency relief. The order also temporarily prohibits Blockvest and Ringgold from violating the antifraud provisions and securities registration provisions.
The SEC’s complaint charges Blockvest and Ringgold with violating the antifraud and securities registration provisions of the federal securities laws. The regulator seeks injunctions, return of ill-gotten gains plus interest and penalties, and a bar against Ringgold to prohibit him from participating in offering any securities, including digital securities, in the future or making misleading statements about regulatory approval.
The action adds to the SEC’s efforts to clamp down on cryptocurrency-related fraud. One of the most prominent examples of these efforts is the action taken by the US regulator against PlexCorps aka PlexCoin. The US regulator had to take an emergency action to stop Dominic Lacroix, a recidivist securities law violator in Canada, and his partner Sabrina Paradis-Royer from further misappropriation of investor funds illegally raised through the fraudulent and unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”. From August 2017 through the present, the defendants have obtained investor funds, purportedly $15 million from thousands of investors, including those throughout the United States and in the Eastern New York District, through materially false and misleading statements.