In House - The FindLaw Corporate Counsel Blog

Blockvest ICO Uses Fake SEC Seal, Gets Sued

A recent criminal complaint filed by the SEC in the Southern District of California federal court charges the cryptocurrency Blockvest with fraud relating to its ICO.

The most notable charges relate to the company and founder claiming that the crypto was both licensed and regulated, and their fraudulent use of the SEC seal denoting that it had been approved by the SEC. The agency has already secured a preliminary injunction freezing the company's assets, as well as halting the planned ICO and stopping the pre-ICO purchases from moving forward.

Photoshop of Approval

In addition to the fake SEC seal that Blockvest is charged with using to dupe potential investors, it is alleged that the company created a fake organization and another seal along with it to further mislead investors. That organization, the Blockchain Exchange Commission, may sound official, but it is officially fake, and Blockvest used the fake organization's fake seal to bolster the crypto's reputation.

For crypto investors, scams and fraud are a huge concern as it seems that there are more bogus cryptocurrencies than legitimate ones these days. And while that investment volatility might drive down prices for early investors and allow for massive rewards, the high level of risk in the mostly unregulated industry means a majority of the investors are going to get the short end of the digital stick, if they get anything at all.

Digital Pump and Dump

For the most part, the world of ICOs is the new final frontier, or wild wild west. New cryptos are created and fail with surprising regularity, and even high-profile investors, like Shark Tank's Mark Cuban, can be taken in by the allure of the massive gains digital coins can promise.

Currently, Bitcoin is facing a major crash and is at an all-time low since the not-so recent spike. Last year, in 2017 around the end of the year, it was nearing $20,000 per coin. Now, it's valued at under $6,000.

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