A federal judge for the Southern District of California has argued in a recent court filing that blockchain-based assets exchange Blockvest and founder Reginald Buddy Ringgold III should lose their defense in a Securities and Exchange Commission (SEC) case after allegations of fraud and misconduct.
Court documents released on April 20 show Judge Michael S. Berg has recommended granting plaintiff SEC’s “Motion for Terminating Sanctions” against Blockvest.
“The Court has considered alternative monetary, evidentiary, and issue preclusion sanctions, and concludes that, under the facts of this case, even broad sanctions would not adequately redress Defendants’ egregious misconduct and deceit.”
Blockvest and its founder’s “egregious misconduct and willful deception concerning key issues in this litigation justifies the imposition [of terminating sanctions],” the Judge said in his filing, while admitting sanctions were a “harsh remedy” for the exchange’s actions.
Allegations of falsifying documents
Blockvest ran a $2.5 million pre-initial coin offering before being restricted by the SEC in October 2018. While the court initially said the exchange had not violated securities laws by selling “unregistered securities in the form of digital assets” with its BLV tokens, the commission later gained an injunction against Blockvest.
As the case has developed, Reginald Buddy Ringgold, III, aka Rasool Abdul Rahim El, and Blockvest have been accused by the SEC of forging signatures and encouraging false declarations for key evidence in the lawsuit. The April 20 filing is part of the court’s response to the SEC motioning for a default judgement on terminating sanctions.