The Securities and Exchange Commission (SEC) announced that it has received a preliminary injunction against initial coin offering (ICO) operator Blockvest.
As per the February 14 press release, a judge from the United States District Court for the Southern District of California granted the order to the SEC.
Last October, the US financial market watchdog halted Blockvest’s ICO citing violations of securities regulations. The SEC also alleged that the firm was falsely claiming to have approval from the regulators.
“The defendants claimed that they were planning to raise funds through an initial coin offering for several financial products that would generate passive income and double-digit returns based on misrepresentations about the firm’s regulatory status,” the SEC noted.
“The defendants used the SEC seal without permission and falsely claimed that their crypto fund was ‘licensed and regulated.’”
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The regulator also pressed charges against Blockvest’s founder Reginald Buddy Ringgold, who also goes by the name Rasool Abdul Rahim El.
In October 2018, the same court enacted an asset freeze against Blockvest and halted its token offerings. However, the court reversed its decision a month later as the SEC failed to demonstrate that the BLV token qualifies as securities.
In the latest order, the court ruled that “based upon the additional submitted briefing [the court] concludes that Defendants made an ‘offer’ of unregistered securities which violated Section 17(a) [of the Securities Act of 1933].”
The court also noted that “the SEC has demonstrated that the promotion of the ICO of the BLV token was a ‘security’ and satisfies the Howey test.”
SEC’s Crypto Busts
Blockvest is not the sole company on the SEC radar as the watchdog is going aggressively after questionable token sales in the US. As Finance Magnates reported in last November, the SEC opened an investigation against the financial advisors over their links to crypto market.
The regulator also charged celebrity boxer Floyd Mayweather Jr. and music producer DJ Khaled for not disclosing payments they received for promoting ICOs.