A trading company was recently suspended by the U.S. Securities and Exchange Commission (SEC) after the rogue firm released two questionable press releases. The documents revealed that the firm was apparently issuing crypto assets through an SEC-approved offering. It turns out these claims were nothing more than a sham, as the firm hadn’t received the blessing of the SEC.

News of the SEC’s suspicion was circulated in a press release, which has been officially posted on the sec.gov website.

In the statement made by the governmental agency, the company under scrutiny was brought under the microscope after it claimed to have partnered with an SEC-qualified custodian, who would reportedly manage the firm’s cryptocurrency holdings.

The saga has led to the SEC’s Office of Investor Education and Advocacy (OIEA) to release an investor alert in regards to ICOs making false claims about the SEC and Commodity Futures Trading Commission’s (CFTC) overt endorsement of digital asset investments.

SEC Has Suspended American Retail Group, Inc

These false claims were reportedly issued by American Retail Group Inc. via two questionable documents, which made rounds in August of this year. The circulations essentially implied that there was an official partnership enabling the firm to garner the regulatory body’s approval for an ICO offering. This, of course, was likely done in an attempt to create a more attractive and trustworthy proposal to prospective investors.

As a result, the SEC’s OIEA has created an educational website about ICOs and the SEC for investors for future reference on the subject.

SEC Has Said It Does Not Qualify Custodians for Digital Assets nor Endorse Them  

In its press release, SEC’s Enforcement Division’s Cyber Unit Chief, Robert A. Cohen, has warned investors to be wary of claims being made by ICOs. The regulator claims that projects that say that their cryptocurrency offerings are backed by the SEC are likely swindles, as such claims have been debunked on multiple occasions.

At the time of writing, there is no official enforcement program for ICOs, and therefore, verifying claims regarding coin offerings and their relation to “SEC-approved” bodies may be rather tough on the regulatory body. This, of course, likely led the American Retail Group Inc. to issue the aforementioned releases, which raised concerns and caught the eye of the proper authorities, resulting in the current suspension imposed.

Usually, when the SEC suspends trading, the suspension period covers around 10 days until further documentation is presented. This suspension can continue past the 10 day period, only if an SEC-issued request for further documentation is not met, which may prevent the broker-dealer from advertising its stock for traders to purchase.

However, in this case, a request for information probably isn’t required, due to the fact that the SEC does not endorse the use of stocks in cryptocurrency transactions. And as such, the ICO will likely need to issue a second press release retracting its earlier comments in regards to its “SEC-approved” cryptocurrency offering.

My name is James Donaghue. I am an SEO freelance consultant and investor in blockchain technologies. I am a proud father, my hobbies include football (soccer), tennis, swimming, and cycling, and I also love travelling. Another hobby of mine is staying up to date with the financial markets - I used to work within the financial sector as an IT engineer setting up Reuters and Bloomberg market data feeds. During that time I learned a lot about the financial industry and came across the blockchain in its early conception. It wasn't until around 2015 I really started to take a keen interest in its development. Since then I have been studying the progress of the blockchain and investing in cryptocurrencies. I now contribute news, data, and reviews about ICOs, blockchain solutions, and cryptocurrencies regularly. I truly believe that disruptive blockchain tech will be an integral part of all of our futures. As such, I plan to continue following trends, breaking news, and the future development of blockchain solutions across all industries.

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