Input your search keywords and press Enter.

SEC Suspends American Retail Group over False Endorsement Claims

sec

The US Securities and Exchange Commission is slowly bringing clarity into the crypto niche. In fact, it has considered Bitcoin and Ethereum as commodities. Also, lawmakers are asking the SEC to clarify its stand on cryptocurrencies in order to have a bill.

Recently, the US Securities and Exchange Commission decided to suspend the Nevada-based company American Retail Group. The company was able to acquire the crypto trading platform Simex earlier this year. The primary reason for the suspension is because of the false claim that the SEC endorsed the crypto transactions.

The company has been accused of misrepresenting that they are working with an SEC qualified custodian that handle the crypto deals. In addition to this, the company is also accused of carrying out a registered public offering of stocks that are “officially registered in accordance with SEC requirements”.

Robert Cohen who works as SEC’s Enforcement Division Cyber Unit issued a statement saying that the agency “does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering”.

ICO Scams

This isn’t exactly the first ICO that was suspended by the SEC. Just a month ago, the SEC sued Blockvest, which is another ICO. It was reported that Blockvest claims that it has SEC approval. According to the agency, “Blockvest and Ringgold also allegedly misrepresented Blockvest’s connections to a well-known accounting firm, and continued their fraudulent conduct even after the National Futures Association (NFA) sent them a cease-and-desist letter to stop them from using the NFA’s seal and from making false claims about their status with that organization”.

This isn’t surprising since there is a growing number of ICOs that have been considered scams. In fact, 1 in every 5 ICOs today can be considered a scam. And also, a good number of ICOs have issued tokens that have depreciated in value over the years.

Fraud in the Industry

2018 is all about different regulatory changes in the niche. In fact, regulatory changes differ for different countries. There are those that have a stricter measure against cryptocurrencies while there are those that are more open. Last week, the CFTC made its very first anti-fraud enforcement action that involves Bitcoin. A federal judge ordered Bitcoin-denominated hedge fund CEO Nicholas Gelfman and his company Gelfman Blueprint to pay $2.5 million in fines and restitution. The reason for this is that the company operated a Ponzi scheme. It claims that investors could yield high returns.

In addition to the fine, Gelman is now barred from trading permanently. He is expected to “cooperate fully and expeditiously” by the CFTC. Unfortunately for those who were victimized by Gelfman’s Ponzi scheme, the company might not have enough money to pay restitution.

Regulatory changes are said to attract institutional investors at some point. Today, ICE has teamed up with Microsoft to bring Bakkt. You also have the possibility of having a Bitcoin ETF. Though past applications were rejected, the one that was submitted by Solid X and VanEck could actually be approved. And also, you have Fidelity entering the crypto market. Could these actually bring institutional investors? Considering the number of ICOs that have been sacked by the SEC, is there regulatory clarity at this point?

Mark Ayesa

Mark manages our editorial team, social handles and is always on the lookout for great writing talent to contribute to our site. On a day-to-day basis he ensures the content on CryptoCurrency365.com is of the highest quality and also carries out extensive research on any current hot topics of the crypocurrency world for our writers.

Leave a Reply

Your email address will not be published. Required fields are marked *


Notice: Undefined variable: font_family in /home/cryptocurrency35/public_html/news/wp-content/plugins/gdpr-cookie-compliance/moove-modules.php on line 282