2018-10-23 02:13 |
A press release from the US Securities and Exchange Commission (SEC) has announced the suspension of securities trading for a Nevada-based firm, which had made false claims of being “under SEC Regulations.” The company in question, American Retaili Group Inc., aka Simex Inc., had stated in two press releases to have partnered with an SEC-qualified custodian for the use of crypto transactions and a purportedly registered public offering of preferred stock, the press release explains.
“The SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering,” said Robert A. Cohen, chief of the SEC Enforcement Division’s Cyber Unit, in a statement published on October 22nd.
Simex Inc. had reportedly launched an initial coin offering (ICO) falsely claiming to be “officially registered in accordance [with] SEC requirements.”
The SEC’s Crackdown on Fraudulent ICOsOn October 11th, the SEC issued an investor alert, warning investors to be on the look-out for false claims surrounding SEC endorsements used to promote digital asset investments, reports Cointelegraph. The warning stated that, “Federal government agencies, including the SEC and CFTC [Commodity Futures Trading Commission], do not endorse or sponsor any particular securities, issuers, products, services, professional credentials, firms, or individuals.”
Federal securities law gives the SEC the right to suspend trading in a stock for 10 days, and to “prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.”
In response to the recurring false advertisements of government-approved ICOs, the SEC’s Office of Investor Education and Advocacy has published an Investor Bulletin on initial coin offerings and a mock ICO website for educational purposes.
Government crackdowns on falsely advertised ICOs are becoming increasingly common. Earlier this month North Dakota Securities Commissioner Karen Tyler issued a cease and desist order against three firms for allegedly offering unregistered and fraudulent securities in the form of ICOs.
“The continued exploitation of the cryptocurrency ecosystem by financial criminals is a significant threat to Main Street investors,” said Tyler. “In formulaic fashion, financial criminals are cashing in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment.”
Additionally, in early September, three crypto companies suspected of running fraudulent ICOs came under investigation by the Department of Regulatory Agencies (DORA). These companies had also made claims to have filed what later proved to be falsely registered ICOs with the SEC.
The post SEC Suspends Securities Trading for Nevada-Based ICO appeared first on UNHASHED.
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