November 29, 2018 10:16 PM
The SEC failed to demonstrate that BLV tokens were securities as defined by US securities laws.
On October 5, US District Judge Gonzalo Curiel of the Southern District of California granted the Securities and Exchange Commission's (SEC) ex parte application to, among other things, halt a planned ICO by blockchain-based crypto exchange Blockvest LLC and freeze the assets of Blockvest and its founder, Reginald Buddy Ringgold, III. But on November 27, the judge denied the plaintiff's motion for a preliminary injunction, [1]ruling that the SEC had failed to demonstrate that the BLV tokens sold by Blockvest and Ringold in pre-ICO sales failed to meet the definition of a "security" under US law.
In October, ETHNews[2] reported on the emergency court order obtained by the SEC, which halted Blockvest's planned ICO. The SEC's complaint filed in connection with its application for that order alleged the ICO's backers falsely claimed the ICO had been approved by the SEC. The complaint also alleged Ringgold "promoted the ICO with a fake agency he created called the 'Blockchain Exchange Commission,' using a graphic similar to the SEC's seal and the same address as SEC headquarters." (The Blockchain Exchange Commission[3] does technically exist, at least as a website, though it is not affiliated with the SEC or any governmental regulatory agency.)
According to Tuesday's ruling, during the hearing on the SEC's motion for a preliminary injunction, Ringgold asserted that BLV tokens, which a few investors had purchased during the pre-sale, "were only designed for testing the platform and the testers would not and could not keep or remove BLV tokens from the Blockvest Exchange." Furthermore, Ringgold stated that the 32 investors in the Blockvest exchange had put
