Earlier this week the SEC issued an investor alert after a rouge trading company released two August 2018 press releases stating that their up and coming ICO is in compliance with the SEC.
Concerns were raised about the ICO simply because the SEC does not endorse digital assets. Any ICO claiming otherwise is doing so under the guise of SEC approval in order to appear to be more trustworthy.
The SEC has launched an official investor alert encouraging investors to tread carefully when any organization involved with cryptocurrencies claims to be under the wing of the SEC’s Office of Investor Education and Advocacy (OIEA). In addition to this, the warning also mentions ICOs that claim to be associated with the Commodity Futures Trading Commission’s (CFTC).
Any such statement should be ignored as the ICO is likely a Ponzi scheme or a get rich quick scam looking to swindle investors.
Strong Warning For Those Contemplating ICO Investments
This a strong warning for anyone out there that feels safe investing in any ICO that is operating under the false pretense that it is offering an SEC-approved initial coin offering. Any such claims are not only false, but they are also impossible. Robert A. Cohen of the SEC said in a statement that under no circumstances does the SEC qualify or even endorse any such custodians for cryptocurrency transactions.
False Claims Have Led To The Suspension of a Well-Known Trading Firm
According to a press release by the SEC, the company in question is the American Retail Group. In light of its false claims via two August 2018 press releases, the SEC has suspended the company from trading until further notice. Under normal circumstances, a suspension lasts for around 10 days or can continue until further documentation is produced.
In light of the fact that the SEC does not endorse cryptocurrency transactions, no further documentation can be produced, and therefore the suspension for this particular so-called stock will not be lifted. Alternatively, it could be that the American Retail Group may be required to send additional press releases revoking its claims that its proposed token sale is a registered a public offering of preferred stock.
Web Page Created For Investors To Find Our More About ICOs
As claims such as the one made by the American Retail Group a.k.a. Simex, Inc are quite common, the SEC has created a web page that guides investors when it comes to ICOs. The page answers all the questions an investor needs to know about an ICO, how they operate, and also mentions regulations and licensing.
Therefore, if in the future an investor comes across an ICO that says they are affiliated or approved by the SEC or CFTC, then the proper authorities should be notified so action can be taken to discredit these false promotional tactics.
For those looking for more information, the web page in question can be found here: https://www.sec.gov/ICO .