U.S. Court Orders Blockvest to Pay $700K
- The firm had made false claims to have received regulatory approval from various agencies, one of which was fabricated.
- Blockvest and its founder will need to pay $696,000 in civil penalties, and abide by a number of restraints and conditions moving forward.
United States Securities and Exchange commission logo on entrance of DC building near H street in Washington, DC on 22 September 2018. Shutterstock
After two years of legal battles, it has finally been judged that Blockvest and its founder will have to pay $700,000 in multiple compensations.
According to court documents from last Thursday, the U.S. Securities and Exchange Commission (SEC) requested the court impose a “permanent injunction, disgorgement of funds received from Defendants’ illegal conduct, and civil penalties” to Blockvest and its founder Reginald Buddy Ringgold III, also known as Rasool Abdul Rahim El.
The SEC further claimed that the defendants knew their actions were illegal, but still continued in their endeavor. While the SEC had not given its consent to the 2018 ICO, the firm claimed it was the first “licensed and regulated tokenized cryptocurrency exchange and index fund”. Blockvest had also falsely claimed connections to the Commodity Futures Trading Commission and the National Futures Association, and went was far as to invent a new regulatory body. The court documents read:
“Created a fictitious regulatory agency, the Blockchain Exchange Commission (‘BEC’), creating its own fake government seal, logo, and mission statement that are nearly identical to the SEC’s seal, logo, mission statement as well as using the same address as the SEC’s headquarters.”
The U.S. Southern District Court of California sided with the SEC, and ordered the defendants to refund the 2018 ICO participants, and pay a civil penalty of $332,370, along with a disgorgement of ill-gotten gains of $363,726. Blockvest and Ringgold III must also abide by a number of restraints and conditions put forward by the court.
- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
Coinbase CEO Brian Armstrong appears on stage at the 2014 TechCrunch Disrupt Europe/London, at The Old Billingsgate on October 21, 2014 in London, England. Anthony Harvey/Getty Images for TechCrunch
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
- The U.S. SEC, CFTC, and FTC have all filed separate lawsuits against bankrupt crypto lender Celsius and its former CEO Alex Mashinsky, charging them with multiple counts of fraud.
- Mashinsky was also arrested in New York on Thursday, and later charged by the Department of Justice with securities fraud, commodities fraud, and wire fraud.