SEC Gains Injunction Against Blockvest LLC in Fraudulent Securities Case
The SEC has gained a small victory in their case agonists Blockvest, a blockchain-based asset exchange, by getting an injunction against them on February 14, 2019.
In October 2018, the SEC had suspended Blockvest’s operations, claiming that the firm had been selling unregulated securities through their platform and a court battle then ensued regarding whether Blockvest’s BLV tokens was indeed unregistered security.
On October 27, 2018, it appeared as if Blockvest had the upper hand as a US court dismissed the SEC’s claim due to lack of evidence.
“At this stage, without full discovery and disputed issues of material facts, the Court cannot make a determination whether the BLV token offered to the 32 test investors was a ‘security,’” the documents said, “Thus, Plaintiff [the SEC] has not demonstrated that the BLV tokens purchased by the 32 test investors were ‘securities’ as defined under the securities laws.”
Also included in the ruling was a rejection of the SEC’s request for an injunction against the firm.
Back With a Vengeance
Now, it would seem that the tide has turned and the firm, along with their founder, Reginald Buddy Ringgold, III aka Rasool Abdul Rahim El, will face charges yet again for the same accusation of selling unregistered securities.
The release says:
“The defendants used the SEC seal without permission and falsely claimed that their crypto fund was ‘licensed and regulated. Ringgold also is alleged to have promoted the ICO with a fake regulatory agency he created-the ‘Blockchain Exchange Commission,’ with a seal similar to the SEC’s and the same address as SEC headquarters.”
This is part of the SEC’s aggressive campaign against unregulated digital asset sales and ICOs.
In previous years, the SEC shut down several ICOs due to being unregistered and it seems 2019 will follow suit, even as the SEC is still in deliberation over the crypto ETF. Despite the strictness of the SEC in these matters, it pales in comparison to other countries like South Korea who have banned ICOs altogether.
In this fresh suit, the issue of proving the security status of the BLV Token has been adequately addressed, at least according to the courts.
The released added:
“The court explained that it ‘determines that the SEC has demonstrated that the promotion of the ICO of the BLV token was a ‘security’ and satisfies the Howey test.“