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US SEC Suspends Securities Trading of Nevada-Based Firm for False Crypto Claims

US SEC Suspends Securities Trading of Nevada-Based Firm for False Crypto Claims
By: cointelegraph.com Posted On: October 22, 2018 View: 7

US SEC Suspends Securities Trading of Nevada-Based Firm for False Crypto Claims

The U.S. Securities and Exchange Commission (SEC) has suspended securities trading of a Nevada-based firm for making false claims that its cryptocurrency trading activities were approved by the SEC, according to an announcement published Oct. 22.

Per the SEC’s order, in August 2018 American Retail Group, Inc. aka Simex Inc. published two press releases stating that the company had partnered with a custodian qualified with the SEC.

The partnership would purportedly allow the company to conduct crypto transactions that would be “under SEC Regulations.” American Retail Group also stated in the releases that it was conducting a token offering, that was “officially registered in accordance [with] SEC requirements.”

In response to the company’s statements, Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, said that “the SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an Initial Coin Offering (ICO).”

The SEC noted that under federal securities laws, the regulator can suspend securities trading for 10 days, as well as ban a broker-dealer from soliciting investors to purchase and sell the stock until compliance with certain requirements is met.

On Oct. 11, the SEC issued an investor alert warning investors to be cautious towards  fraudsters that may use false claims about regulators to lure them into buying digital assets and to artificially raise their value.

“Federal government agencies, including the SEC and CFTC [Commodity Futures Trading Commission], do not endorse or sponsor any particular securities, issuers, products, services, professional credentials, firms, or individuals,” the warning reads.

Earlier this month, North Dakota Securities Commissioner Karen Tyler issued cease and desist orders against three firms for allegedly offering unregistered and fraudulent securities in the form of Initial Coin Offerings (ICOs). One of the alleged companies, Advertiza Holdings (Pty) Ltd. falsely claimed to be registered with the SEC and was also not registered to sell securities in North Dakota.

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