Regulators Launch Massive Probe Into Potential Crypto Scams
North American Securities Administrators Association (NASAA), an international investor protection organization, recently launched 70 investigations into a number of questionable cryptocurrency-related investments. Reportedly, over 40 state and provincial regulators from the United States and Canada are part of this massive crackdown. The main target of these probes are ICOs and "investment schemes."
Joseph Rotunda, Director of Enforcement Division at Texas State Securities Board, stated that that the cryptocurrency market is "saturated" with numerous fraudulent schemes. He also said that their preliminary investigations have only uncovered "the tip of the iceberg." Moreover, deceptive marketing tactics are being used to lure investors into various crypto-related scams, according to US regulatory authorities.
BTCrush and Wind Wide Coin Targeted By Regulatory Authorities
BTCrush was warned by American regulators this month for posting videos that showed potential investors the company's large cryptocurrency mining farms. According to regulatory authorities in Texas, who've been leading the charge when it comes to cracking down on crypto scams, the videos had been taken from publicly shared stock footage. In the warning letter sent to BTCrush, Texas regulators alleged that the UK-based company had violated securities laws and had used deceptive marketing tactics.
Wind Wide Coin (WWC Inc), which claims that it's the "fastest growing cryptocurrency trading company" and was offering investors 10x return on their investments, is now also the target of Texas regulators. Reportedly, WWC Inc used misleading marketing and advertising tactics, including posting pictures of Prince Charles and Jennifer Aniston in order to promote their crypto "business." Interestingly, if you go to the company's website right now, then you will see a message saying that they're "down for maintenance."
Using Online Media Content To Deceive Crypto Investors
Commenting on these potentially fraudulent crypto schemes, Rotunda noted:
"Promoters also know that anyone can be anyone and say anything about anything on the internet. Not surprisingly, they are also manipulating photographs, media, testimonials and other online information to deceive the public into believing their claims."US federal regulators such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission have been heavily cracking down on cryptocurrency scams, especially since the past 6 months. Due to the rise of digital currency market, the number of fraudulent activities related to them have also increased drastically. In order to show people how these scams are typically orchestrated, the SEC has even gone as far as creating a website of their own called howeycoins.com.
The purpose of SEC's fictitious website is to show potential investors just how easy it is to create a whitepaper and nice-looking website, along with an online presence on various social media platforms. What the federal regulator is trying to convey to people is that we must never believe everything we read and see on the internet. Also, if it sounds to good to be true, it probably isn't.
This Is Actually Good News For Bitcoin & Other Cryptocurrencies
If you check crypto market prices right now, they are down considerably. More than likely, it's because of this widespread crackdown on cryptocurrency scams. The bigger picture, which many might fail to realize here, is that regulatory authorities are cleaning up the digital currency market for us right now. They're working hard to weed out all the criminal elements operating in the crypto ecosystem.
Massachusetts Secretary of the Commonwealth, William Francis Galvin, stated that the NASAA has uncovered around 30,000 registered cryptocurrency domain names. Also, most of them started to pop up toward the end of 2017 when the the cryptocurrency market reached record-level highs. However, Galvin clarified:
"Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution, [because] it is a serious threat to ... investors."
Posted from my blog with SteemPress : https://cryptocoremedia.com/american-regulators-cryptocurrency/