The United States Securities and Exchange Commission (SEC) announced it had gained an injunction against initial coin offering (ICO) operator Blockvest, overturning a 2018 court order. The regulator reported the development in a press release published on Feb. 14.
Blockvest, which the SEC suspects of offering and attempting to sell unregistered securities via its BLV token sale, will now face fresh charges along with its founder, Reginald Buddy Ringgold, III aka Rasool Abdul Rahim El.
“The defendants used the SEC seal without permission and falsely claimed that their crypto fund was ‘licensed and regulated,’” the release explains, adding:
“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.”
In October 2018, the U.S. District Court for the Southern District of California enacted an asset freeze against Blockvest pending review, halting its ICO. As Cointelegraph reported, however, the decision was reversed the following month after the court claimed the SEC had failed to demonstrate that BLV was a security token.
This latest ruling is what the court itself now challenges.
“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 release continues, stating:
“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.’”
The SEC has vowed to aggressively pursue any entity attempting to sell digital tokens on the U.S. market without the appropriate accreditation. The zero-tolerance stance has received mixed reviews, with some sources concerned about its effect on the growth of the emerging cryptocurrency sector.