SEC Acts Against Cryptocurrency Companies

On October 11, 2018, Securities and Exchange Commission (the “SEC”), the SEC issued a press release announcing that it had obtained an emergency court order to stop an Initial Coin Offering (an “ICO”) by Blockvest LLC and its founder, Reginald Buddy Ringgold, III. Among other things, the company claimed that the ICO had been approved by the SEC and other agencies.  The company also made other apparently fraudulent claims.  And on October 22, 2018, the SEC issued a press release announcing the suspension of trading of America Retail Group, Inc., aka Simex, Inc.  The company had issued two press releases in August 2018, claiming that it would partner with an SEC qualified custodian and implying that the custodian was regulated by the SEC.  In fact, the SEC does not endorse any custodian and was at pains to indicate that the choice of a cryptocurrency custodian should be made carefully.  These two press releases evidence a continued concern by the SEC that cryptocurrency offerings have a high risk of being fraudulent or making fraudulent claims.