Today, the United States Securities and Exchange Commission, SEC obtained an emergency court order halting a planned ICO because those issuing the ICO were luring investors by claiming that they have the regulator’s approval.
According to SEC, Blockvest, the company behind the ICO which is currently in the pre-sale stage, “falsely claimed its ICO and its affiliates received approval from various agencies, including the SEC.”
With one sin leading to another, the Securities and Exchange Commission also found out that the backers of the ICO were using the “SEC seal without permission.” Additionally, Reginald Buddy Ringgold, the founder of Blockvest LCC, created ‘Blockchain Exchange Commission’ a fake agency which used the same address as the one registered for the SEC headquarters.
As it also turned out, Blockvest and Ringgold ignored a cease-and-desist order issued by National Futures Association, a respected accounting firm, which Blockvest had been also using their seal and claiming connections.
Honorable Gonzalo Curiel, Judge, District Court, Southern District of California, ordered that all assets belonging to the ICO backers be frozen awaiting a full court hearing on 18th October. The hearing may lead to the issuance of a preliminary injunction.
Apart from getting a freeze order, the SEC is also seeking “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.”
In the past, Robert Cohen, SEC’s chief, Enforcement Division, Cyber Unit, warned that the Securities and Exchange Commission has no affiliation with investment products. The CFTC has also been on the front line warning investors regarding false endorsement claims.
Even though the SEC obtained an emergency court order halting a planned ICO, and this being just one of the classic ways fraudulent ICOs seek investor attention, do you think investors who fall for scams are lured by falsified records of endorsements and a failure to do a thorough background check?
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