The U.S. Securities and Exchange Commission has put a Nevada-based company in trading timeout for allegedly making false claims about SEC endorsements on cryptocurrency transactions.

The SEC reported Monday that it had suspended trading in the securities of the American Retail Group Inc. based on two news releases that the company issued in August. The company acquired cryptocurrency trading platform Simex earlier this year.

The company is accused of fibbing about working with an SEC-qualified custodian to handle cryptocurrency deals “under SEC regulation” and falsely stating that it was carrying out a registered public offering of preferred stock that was “officially registered in accordance with SEC requirements.”

Attempts to speak with a representative for American Retail Group were unsuccessful.

Robert Cohen, chief of the SEC's Enforcement Division Cyber Unit, noted in a statement that the agency “does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering.”

The SEC sent out an investor alert earlier this month as a warning about false endorsements from the SEC and the U.S. Commodity Futures Trading Commission being used to promote cryptocurrencies and other digital asset investments.

Last week, the CFTC's first anti-fraud enforcement action involving bitcoin resulted in a federal judge slapping bitcoin-denominated hedge fund CEO Nicholas Gelfman and his company, Gelfman Blueprint Inc., with an order to pay $2.5 million in fines and restitution for operating a Ponzi scheme in which he claimed he could yield high returns.

Gelman also was hit with an injunction permanently barring him from trading. And he is required to “cooperate fully and expeditiously” with the CFTC and its division of enforcement in “this action, and in any current or future commission investigation or action related thereto.”

The victims of Gelfman's alleged Ponzi scheme could be left holding the bag, according to the CFTC, which reported that the “wrongdoers may not have sufficient funds or assets” to pay restitution.