SEC clamps down on company making false crypto claims

The Securities and Exchange Commission (SEC) has suspended trading of the American Retail Group (ARGB) after the company made false claims that the agency was it qualified custodian for cryptocurrency transactions.

ARGB was acquired by Simex in May. Simex markets itself as a peer-to-peer digital asset exchange, offering cryptocurrency trading as well as fiat deposits and withdrawals.

The regulator’s report on the suspension states that two press releases issues by Simex made false claims, with one asserting that its token offering was ‘officially registered in accordance with SEC requirements’, while another stated cryptocurrency transactions would be ‘under SEC regulations’.

The Chief of the SEC Enforcement Division’s Cyber Unit, Robert A. Cohen, said: “The SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering.”

The SEC has the power to suspend trading of a stock for 10 days, prohibiting brokers from soliciting investors into buying or selling the stock until certain reporting requirements are met.

This is not the first time it has delved into regulation in the cryptocurrency space. It posted information and warnings on its website earlier this year to educate and deter potential investors about ICOs.

For Coin Rivet’s comprehensive guide on ICOs, click here.