Shaurya Malwa · 3 hours ago · 2 min read · Insights via Michael Moro
Wyoming › Regulation
Preliminary Injunction Against Blockvest for Fraudulent Securities Offering and Illegal Use of SEC Seal
The SEC filed a complaint against Blockvest and its founder for allegedly making unregistered securities offerings and using the SEC seal without permission. On Feb. 14th, the US District Court of California entered in a preliminary injunction against the firm.
Accusations Against Blockvest
The Feb. 14th complaint filed against Blockvest LLC details that the company, and specifically its founder Reginald Buddy Ringgold III, were purportedly involved in illegal misrepresentation of products and licensing. According to the initial court order, Blockvest LLC is a “Wyoming limited liability company that was set up to exchange cryptocurrencies but has never become operational.”
The second filing against Blockvest indicates that the company offered “unregistered securities in the form of digital assets called BLV tokens which were sold through an ICO. The firm claimed the tokens “would generate passive income and double-digit returns” based on misrepresentations about the firm’s regulatory status.
According to the SEC, during the ICO and following promotion of Blockvest’s services and products, the company utilized the SEC seal of approval illegally to misrepresent the legitimacy of the service.
Ringgold also invented a different governmental agency titled the “Blockchain Exchange Commission” which he used to promote Blockvest’s services. The Blockchain Exchange Commission is a fake entity, which has a seal very similar to that of the SEC and is purportedly registered at the address of the SEC headquarters.
Because of these allegedly fraudulent activities, the SEC is looking to conduct an enforcement action against Blockvest and its founder.
According to the ICO whitepaper released by Blockvest, BLV (ERC20) is a utility token that’s representative of the “top performing cryptocurrency index.” Blockvest aims to evolve as a “decentralized ecosystem” which aims to facilitate price stability by using “Yield,” a native stablecoin of the Blockvest network.
Blockvest’s goals and structure were solely developed by Ringgold using his 17 years experience in the finance industry. Ringgold was an active trader on European, American and Asian markets during his finance career.
Since 2017, the SEC was relatively inactive in regulating projects. Going into 2018 and 2019, it appears that the SEC has decided to begin levying enforcement actions against unscrupulous projects.
The SEC charged Floyd Mayweather and DJ Khaled for promoting a fraudulent ICO, investigated SALT’s $50 million sale, charged the founder of EtherDelta for operating the unregistered exchange, and penalized two more ICOs for unregistered securities offerings. And, it doesn’t seem like there will be any shortage of unscrupulous projects to pick from.