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SEC Stops Fraudulent ICO That Falsely Claimed SEC Approval

Posted on October 11, 2018 at 2:05 PM

The SEC announced that it has obtained an emergency court order halting a planned initial coin offering (ICO), which backers falsely claimed was approved by the SEC. The order also halts ongoing pre-ICO sales by the company, Blockvest LLC and its founder, Reginald Buddy Ringgold, III.

An SEC complaint unsealed alleged that:

  • Blockvest falsely claimed its ICO and its affiliates received regulatory approval from various agencies, including the SEC. 
  • 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." 
  • 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 also allegedly misrepresented Blockvest's connections to a well-known accounting firm, and 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.

An order freezing defendants' assets and other emergency relief was issued and also temporarily prohibited Blockvest and Ringgold from violating the antifraud provisions and securities registration provisions. A hearing is scheduled for Oct. 18, 2018, to consider continuing the asset freeze and issuance of a preliminary injunction.

Blockvest and Ringgold were charged with violating the antifraud and securities registration provisions of the federal securities laws. The complaint sought 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 misrepresentations about regulatory approval.

Read More:
Release
https://www.sec.gov/news/press-release/2018-232" target="_blank">https/www.sec.gov/news/press-release/2018-232

Complaint
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-232.pdf" target="_blank">https/www.sec.gov/litigation/complaints/2018/comp-pr2018-232.pdf

Investor Alert
https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-alert-watch-out-false-claims-about-sec" target="_blank">https/www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-alert-watch-out-false-claims-about-sec


Categories: Fraud