The SEC announced that they have suspended the trading for $ARGB due to questions surrounding its statements about partnering with a claimed SEC-qualified custodian for use with cryptocurrency transactions and a purportedly registered public offering of preferred stock.
The SEC’s trading suspension order says that two August 2018 press releases issued by Nevada-based American Retail Group, Inc. (OTC: ARGB) aka Simex, Inc. claimed that the company had partnered with an SEC qualified custodian for use with cryptocurrency transactions that would be “under SEC Regulations,” and that the company was conducting a token offering that was “officially registered in accordance [with] SEC requirements.”
Earlier this month, the SEC issued an investor alert that warned investors to be vigilant for false claims about SEC endorsements used to promote digital asset investments.
“The SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering,” said Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit.
Legally, this suspension can last up to 10 days, and a prohibition on soliciting new investors can last until specific reporting requirements are met.
The SEC’s Office of Investor Education and Advocacy has issued an Investor Bulletin on initial coin offerings and a mock ICO website to educate investors. Additional information about ICOs is available on Investor.gov and SEC.gov/ICO.
Regulations like these may seem like a pain for upcoming ICOs, but it’s a good way to ensure that the system is regulated and because of this we might be seeing more legitimate ICOs in the future.