This October, the SEC had suspended Blockvest’s Initial Coin Offering (ICO) on the false basis of obtaining SEC approval. Also allegedly Blockvest founder Reginald Buddy Ringgold III is also accused of promoting the ICO with a fake agency he created called the “Blockchain Exchange Commission”. A graphic similar to the SEC’s seal and the same address as SEC headquarters was also used. However, in the latest turn of events this week, the U.S. District Court for the Southern District of California ruled that the SEC had “failed” to demonstrate that the tokens in question were in fact securities, according to the Howey Test. Interestingly, SEC itself has previously insisted on the usage of Howey Test on cryptocurrencies to determine if they are securities. The Howey Test, established in 1946, so far withstood the test of time.
Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, in October 2018:
“We allege that this ICO is using both the SEC seal and a made-up crypto regulatory authority to trick investors into believing the ICO was approved by regulators, the SEC does not endorse investment products and investors should be highly skeptical of any claims suggesting otherwise.”
U.S. District Court for the Southern District of California, November 2018:
“At this stage, without full discovery and disputed issues of material facts, the Court cannot make a determination whether the BLV token offered to the 32 test investors was a ‘security,’ thus, plaintiff [the SEC] has not demonstrated that the BLV tokens purchased by the 32 test investors were ‘securities’ as defined under the securities laws.”
Stay tuned and don’t miss the future. The Future is Now!
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