A US judge has accused Blockvest and its CEO of “egregious misconduct and willful deception” in their recent defense against the Securities and Exchange Commission (SEC) over its 2018 ICO. Judge Gonzalo P. Curiel sided with the SEC and agreed to issue a terminating sanction in the case against Blockvest and Reginald Buddy Ringgold, III, following accusations that the company falsified evidence in the case, which they initially won back in December 2018. Ringgold now faces the prospect of jail as a result of Monday’s decision.
Blockvest Told Lies From the Outset
Blockvest held an ICO between July and September 2018, where they raised $2.5 million towards the development of the platform, which purported to be a cryptocurrency index fund that autonomously tracked the top 30 cryptocurrencies. However, shortly afterwards the SEC filed a complaint against Blockvest and its CEO Reginald Buddy Ringgold, III, alleging that the company had sold securities without a license – the exact same grievance leveled at untold cryptocurrency ICOs since 2017.
Blockvest incriminated themselves out of the gate by claiming that they were “the first [U.S.] licensed and regulated tokenized crypto currency exchange and index fund”, which was a bare faced lie mean to entice investors, made worse by the fact that they created a fictitious regulatory agency, the Blockchain Exchange Commission, to certify them.
They also claimed to have been audited by Deloitte, which again wasn’t true. This must have been catnip to the SEC, who pounced on them in October 2018, although Blockvest looked to have scored a victory when Judge Curiel ruled two months later that the BLV tokens at stake should not be classed as securities.
Blockvest Falsified Evidence
Blockvest’s celebrations were cut short however when it emerged that Ringgold and others had gone full Craig Wright and falsified their evidence, with the SEC claiming that they “willfully and in bad faith deceived the Court by filing forged and false declarations in support of their opposition to Plaintiff’s motion for a preliminary injunction.”
At the heart of the complaint is the accusation that “four of the declarations were knowingly deceptive or forged” and that Ringgold “directed his affiliate, Amanda Vaculik, to lie during her interview with SEC, and to submit a false declaration”, among other charges.
Ringgold Faces Prison
As a result, the SEC requested that the court terminate sanctions against Blockvest and Ringgold, to which Judge Curiel assented, stating that, “Denying relief or giving them [the defendants] another chance would simply reward [defendants’] misconduct.” Terminating sanctions is a punishment reserved for grossly improper litigation behavior that terminates the offending party’s participation in the case, bringing it to an end and warranting severe punishment for the perpetrators.
It is highly likely therefore that, because of his actions in the courtroom rather than with the ICO, Ringgold is looking at a spell in prison and a hefty fine, when instead he could have done what countless other crypto projects have done, and settled the case out of court.