Fraudulent initial coin offerings (ICOs) are becoming a permanent feature in the crypto sphere. The US Securities and Exchange Commission (SEC) reported on Oct. 11 that it obtained an emergency court order to halt a planned fraudulent ICO claiming to be the “first [U.S.] licensed and regulated tokenized cryptocurrency exchange and index fund.” The SEC claims that Blockvest LLC and its founder, Reginald Buddy Ringgold, III, also known as Rasool Abdul Rahim El, have violated securities laws, misled investors, used SEC’s seal without approval, falsified business connections, and more.
Blockvest LLC Crimes
Blockvest LLC and Ringgold falsely claimed to be approved and registered by the SEC and went as far as using SEC’s seal to promote their ICO. Ringgold is accused of listing a nonexistent regulatory agency known as the Blockchain Exchange Commission (BEC). The BEC is presented as a regulator of the digital token asset space, which is entirely not true.
BEC’s logo is a copycat of SEC’s, its mission statement was plucked out of SEC’s, and to make matters worse, its offices have the same address as SEC’s headquarters.
Robert A. Cohen, chief of the SEC Enforcement Division’s Cyber Unit, confirmed the allegations and said:
“We allege that this ICO is using both the SEC seal and a made-up crypto regulatory authority to trick investors into believing the ICO was approved by regulators. The SEC does not endorse investment products and investors should be highly skeptical of any claims suggesting otherwise.”
SEC’s cyber unit was created in 2017, and its mandate is to investigate crimes associated with initial coin offerings and distributed ledger technology.
Blockvest claims to have sold BLV digital tokens worth more than $2.5 million in its pre-ICO and would raise more than $100 million to fund the development of an actual working product. The fraudulent company says that it is partnered with Deloitte Touche Tohmatsu Limited and is audited by the same. It goes without saying that this is not true and another fabricated marketing lie.
The fraudulent firm and its founder used the seal of the National Futures Association (NFA) to gain credibility and attract more investors. The NFA issued a cease-and-desist order, which the firm ignored.
At the time of writing, Blockvest’s website was still operational, and its first page has a Special Announcement section stating:
“The BLV Private Token Sale has been halted until further notice. The Blockvest highly anticipated DEX platform will be released as planned in Q4 2018.”
The SEC sought for and received an emergency court order to freeze the upcoming ICO and is pushing for Blockvest LLC and Ringgold to return all proceeds obtained from the fraudulent activity with added interest and penalties. The SEC also wants Ringgold to be barred from offering any securities in the future. The case continues, and its next hearing will be held on Oct. 18.