The U.S. Securities and Exchange Commission (SEC) has issued an order to suspend the crypto trading services of American Retail Group Inc. which trades on OTC markets. This U.S.-based company came under the scanner of the SEC due to its false claims of approved cryptocurrency custodian policies.
The American Retail Group which is also known as Simex Incorporated is a Nevada-based digital asset exchange. The SEC has suspended its services till November 3 after the firm claimed that it has partnered with an SEC qualified custodian for crypto transactions such as Bitcoin. The SEC’s Cyber Unit enforcement Chief Robert A. Cohen stated that the SEC does not qualify or endorse custodians for the cryptocurrency. He said that investors need to be vigilant while considering an investment in an initial coin offering.
The SEC had raised another red flag since the Simex exchange had started offering tokens for crypto trading. These tokens were apparently officially registered in accordance with SEC’s requirements. The SEC had recently also suspended the services of Blockvest, an ICO as the firm was conducting business under the false pretense of having received SEC’s approval.
Under the federal securities laws, the SEC has the prerogative of suspending trading in a stock for 10 days. It can also generally prohibit a broker-dealer from soliciting investors to sell or buy the stock again until certain reporting requirements are met, as stated in the AMBCrypto report.
Simex had announced in August 2018 the beginning of the public offering of its convertible preferred shares in the amount of 10 million shares. The firm had stated that the raised funds were to be used for increasing the liquidity of the digital assets exchange platform, marketing and other development initiatives of the platform.
Crypto exchange Simex’s SMX token which was introduced, was supposed to allow users to reduce the commissions during crypto trading on the exchange. This offer was supposed to last until the shares are fully sold out or until March 1, 2019, as stated in the Crowdfund Insider report.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]