Judge halts Blockvest from issuing tokens, reversing prior decision

Yesterday a San Diego federal district court judge granted the SEC’s request for a preliminary injunction (via a motion for partial reconsideration of the Court’s order denying preliminary injunction) against San Diego-based initial coin offering (“ICO”) issuer, Blockvest, LLC.  

QUICK VOCAB:  A preliminary injunction is a type of remedy issued by a court.  Typically, courts will issue a preliminary injunction only if certain high standards of proof have been satisfied.  The injunction orders the defendant to refrain from certain conduct while the merits of the allegations are decided. There are two types: permanent and preliminary (or temporary).

Previously, the court had ruled that the SEC failed to show the court that Blockvest’s tokens are securities. The company had claimed its ICO was endorsed by three different federal regulators, including the SEC.  

The SEC’s action against Blockvest alleges several violations of federal securities laws.  Guess this decision just goes to show the danger of marketing with phony endorsements. Now that some of the preliminaries are out of the way, the case will move forward.  Many of the SEC enforcement actions have settled… stay tuned.  

Primary source documents:

  1. SEC press release (html). 
  2. SEC v. BLOCKVEST, LLC and REGINALD BUDDY RINGGOLD, III a/k/a RASOOL ABDUL RAHIM EL – Decision (PDF). 

The foregoing article is provided for informational purposes only and is not legal advice or a legal opinion, and does not create an attorney-client relationship. It may not apply to your specific facts or circumstances, and you should not act or rely on any information contained in this article without first seeking the advice of an attorney licensed to practice in your state.

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