As it turns out, Blockvest isn’t the SEC-defeating hero that cryptoland was hoping for.

On Thursday, U.S. District Judge Gonzalo Curiel granted the SEC’s request for a preliminary injunction against the California-based Blockvest, a tokenized derivatives exchange that the Commission alleges violated a litany of federal securities laws. In granting the SEC’s motion, Judge Curiel reversed his own much-ballyhooed ruling issued in late November that determined the SEC did not have enough evidence to claim that Blockvet’s BLV token is a security under federal law.

After receiving this highly publicized and unprecedented legal defeat at the hands of a besmirched crypto startup, the SEC essentially asked the judge for a redo, filing a motion for reconsideration on the grounds that the court “committed clear error” in its initial decision. And this time, it got what it wanted.

For starters, the Commission got the injunction, which means Blockvest is "preliminary enjoined" from violating federal securities law. But that’s really secondary. What’s important is that the SEC got the Court to agree that what it originally claimed was an unregistered and fraudulent securities offering was actually a securities offering all along.

Judge Curiel cited two reasons for his about-face: a revised argument from the SEC that Blockvest’s pre-sale of its BLV token satisfies the “Howey test” and therefore qualifies as an investment contract (i.e. security); and “newly discovered evidence” that supported the SEC’s contention that Blockvest’s CEO and founder, Reginald Buddy Ringgold III, is likely to commit future violations. (Blockvest did not respond to Decrypt’s request for comment.)

As Ringgold explained to Decrypt last October, part of Blockvest’s defense rests on the company’s claim that no ICO took place. Ringgold argued to the court last November that Blockvest’s token sale only involved 32 “testing participants” who put in less than $10,000 worth of Bitcoin and ETH in total. At the time, Judge Curiel’s decision to deny the injunction appeared to hinge on checks produced by the SEC from investors with the words “Blockvest” or “coins” written in the notes. The judge ruled this evidence wasn't not enough to prove that these investors had read Blockvest’s marketing and expected to profit from purchasing the tokens—a key element of the Howey test.

By the looks of it, all the judge needed was a second crack at Blockvest’s website, whitepaper, and social media posts to throw all that out the window. Citing Section 17(a) of the U.S. Securities Act and an "additional briefing" from the SEC that included further details about Blockvest's promotion of the sale, Judge Curiel ruled that the contents of those materials were not only enough to satisfy every prong of the Howey test, they also constitute an “offer” of securities to the public at large—never mind those 32 testing investors and what they did or didn’t read.

On top of that, Curiel also cited as reasons for his reversal Ringgold’s creation of a fictitious regulatory agency, the “Blockchain Exchange Commission,” which utilized “a nearly identical seal, logo and mission statement as the SEC to provide a false appearance that the ICO had regulatory approval and was safe.” All of which are claims that Ringgold, apparently, “does not dispute,” according to the judge.

If that weren’t enough, Curiel noted he was further troubled by the fact that Ringgold’s lawyers up and quit on him in the middle of these proceedings, moving to withdraw themselves from representing Ringgold after claiming that he tried to "file certain documents that counsel could not certify" under federal court rules. “In fact," Curiel said, "when defense counsel declined to file the documents, Defendants attempted to file such documents with the Court without counsel’s permission or signature and the documents were rejected by the Court Clerk.”

While there is no one as damaged by this reversal of fortunes as Blockvest itself, a close second has got to be any crypto startup that hung its hopes on the outcome of this case—namely, social media startup, and “unicorn,” Kik, which raised nearly $100 million in token sales in 2017.

Ted Livingston, CEO and founder of the Canadian messaging app company told the Wall Street Journal two weeks ago that he expects to be served with an SEC enforcement action over the alleged sale of “unregistered securities” any day now, and Kik intends to take its case to court. Interestingly, and perhaps now regrettably, Kik’s 39-page response to the SEC’s Wells notice includes numerous references to Blockvest and the SEC’s previous inability to prove that an investment opportunity had been promised in Ringgold's case. So much for that.

No, definitely not the hero crypto wanted. But, in need of tough lessons and quick maturation, might Blockvest be the (anti)hero crypto needs?