The Securities and Exchange Commission on Monday suspended trading in stock of a public company that it alleges misleadingly claimed to have SEC approval for cryptocurrency-related activities.
“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 Cohen, chief of the SEC Enforcement Division’s Cyber Unit, which leads cryptocurrency investigations, in a release.
The suspended company, American Retail Group, acquired Simex, Inc., an international cryptocurrency exchange incorporated in Las Vegas, Nevada, in May of this year and promptly changed its name to Simex while continuing to trade under the American Retail name. The SEC cited multiple instances in August press releases where the company allegedly claimed to have official approval from the SEC for cryptocurrency-related activities.
Simex did not immediately respond to an emailed request for comment.
The SEC and Commodity Futures Trading Commission issued an investor alert earlier this month warning against the use of language indicating SEC approval for cryptocurrency-related investments.
The commission can suspend public trading of stock for 10 days and prohibit broker-dealers from soliciting investments until reporting requirements have been met.