The United States Securities and Exchange Commission (SEC) declared that it had obtained a restriction order against initial coin offering (ICO) operator Blockvest and its founder Reginald Buddy Ringgold, III aka Rasool Abdul Rahim El for conducting deceptive offers of securities, reassessing the court’s prior order that was issued in 2018.
The Honorable Gonzalo P. Curiel of the United States District Court for the Southern District of California issued the preliminary injunction which was earlier rejected on the grounds of “disputed factual issues as to the nature of the investment being offered to the alleged investors.”
The SEC suspected the offerings and the attempts made by Blockvest to sell unregistered securities through its BLV token sale. During the beginning of last October, the SEC had filed a complaint that the defendants were planning to obtain funds through initial coin offering (“ICO”) which would be used for several financial products that would assist them to generate passive income and give double-digit returns. In the complaint, it also stated that all such activities were dependent on misrepresentation with respect to the firm’s regulatory status.
As per the complaint, the defendants had utilized the SEC’s seal without their approval and had wrongly alleged that their crypto funds were “licensed and regulated” and abided with the SEC’s issued guidelines. Further, Ringgold has promoted the ICO through a sham regulatory agency which he had developed with the name of “Blockchain Exchange Commission” that comprised of a seal which was almost similar to that of the SEC and also consisted of the same address in order to successfully conduct the wrongdoing.
The release stated that “The court ruled that defendants are enjoined from violating provisions of the federal securities law prohibiting fraudulent offers or sales of securities. In particular, 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 further added an explanation 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.”
The litigation is conducted by Amy J. Longo of the Los Angeles Regional Office with the support of Brent W. Wilner, David S. Brown, Robert Grasso, and Matthew Himes, who executed the process of investigation procedures effectively. The case is being supervised by a group of members that includes Diana K. Tani, John W. Berry, Robert A. Cohen, and Joseph G. Sansone of the Los Angeles Regional Office and Cyber and Market Abuse Units.