WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission said on Monday it temporarily suspended trading in shares of American Retail Group after the company claimed SEC approval as a custodian for cryptocurrency trading.
The agency recently cautioned investors that the agency does not issue such endorsements or approvals.
Nevada-based American Retail Group, also known as Simex Inc., claimed in August it had partnered with an SEC-qualified custodian for cryptocurrency transactions that would be “under SEC Regulations,” according to the agency. The company’s press releases also said Simex was offering a token that was “officially registered in accordance [with] SEC requirements.”
The enforcement action came weeks after the SEC issued a warning to investors to be wary of companies using purported SEC endorsements to tout digital currencies or tokens.
“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 A. Cohen, the SEC’s Cyber Unit enforcement chief.
Trading in the company’s securities is halted until Nov. 3, according to the SEC order.
The company did not immediately respond to a request for comment.
Reporting by Katanga Johnson and Pete Schroeder; Editing by Dan Grebler