The U.S. Securities and Exchange Commission has suspended trading services in American Retail Group after the company claimed to offer ICO registered with the regulator.
The company held an Initial Coin Offering (ICO), which as per them is in accordance with the requirements of SEC and were collaborating with SEC qualified custodian for crypto trading. The company was offering a sale of tokens which they claimed to be officially registered with respect to the SEC requirements.
The enforcement action came after SEC issued a notice to investors to be attentive of firms that are using pretended endorsements of SEC to promote digital cryptocurrency.
As per the Enforcement Division Cyber Unit Chief, Robert Cohen, the claims occurred in the month of August are not true. He said that SEC doesn’t approve custodians for the cryptocurrency. The investors need to consider caution while investing in an Initial Coin Offering.
If we consider the current federal securities laws then the stock can be suspended for around 10 days. The press release suggests that laws mostly block broker-dealer from desire investors in order to purchase and sell the stock.
This is not the first time when SEC is taking action against a company that fetches fake approval of a regulatory entity. On October 11, the agency took emergency court orders against BlockVest and their owner, Reginald Buddy Ringgold, who claimed their ICO to be registered with SEC, and they even used the seal of SEC to make it look valid.
The press release, in order to provide education about ways to keep the safety in the industry, concluded that the U.S. Securities and Exchange Commission office of Advocacy and Investor Education has announced a Bulletin on initial coin offering and a website regarding ICO to help investors gain knowledge. More information regarding Initial Coin Offering is available on Investor.gov and SEC.gov/ICO.