California Launches Crackdown on 11 Crypto Firms Accused of Operating Ponzi Schemes

The California Department of Financial Protection and Innovation (DFPI) has cracked down connected 11 cryptocurrency companies that are accused of violating California securities laws. Nine of the firms reportedly solicited funds from investors successful bid to commercialized cryptocurrencies connected the customer’s behalf. One of the accused companies pitched an alleged metaverse bundle improvement scheme, and different steadfast claimed to beryllium a “decentralized concern (defi) platform.”

11 Crypto Firms Targeted by California’s Department of Financial Protection and Innovation

California’s fiscal regulator the DFPI has been targeting crypto plus companies and connected Tuesday, the fiscal watchdog launched a “crackdown” against adjacent to a twelve integer currency-centric entities. The DFPI “issued desist and refrain orders against 11 antithetic entities for violations of California securities laws,” the regulator said connected September 27. The state’s regulator further noted that the operations are accused of moving a pyramid oregon Ponzi scheme.

“The entities are each alleged to person utilized capitalist funds to wage purported profits to different investors, successful the mode of a Ponzi scheme,” the DFPI’s press release notes. “Furthermore, each of the entities had a referral programme that operated successful the mode of a pyramid scheme. The entities promised to wage investors commissions if they recruited caller investors, and further commissions if the investors that they recruited, successful turn, recruited caller investors.”

The DFPI’s crackdown follows the cease and desist order it sent to the crypto lender Nexo connected Monday. Nexo is accused of offering and selling “unqualified securities, successful the signifier of Earn Interest Product accounts,” since “at slightest June 2020,” the regulator’s ailment details. The 11 desist and refrain orders issued connected Tuesday item that the entities allegedly offered “classic examples of precocious output concern programs (HYIPs).” The 11 crypto companies named successful the desist and refrain orders include:

• Cryptos OTC Trading Platform Limited d/b/a COTP
• Elevate Pass LLC
• Greencorp Investment LLC
• Metafiyielders Pty Ltd d/b/a Metafi Yielders
• Pegasus
• Polinur ME Limited
• Remabit
• Sity Trade
• Sytrex Trade
• Vexam Limited
• World Over the Counter Limited d/b/a World OTC

During the announcement connected Tuesday, DFPI commissioner Clothilde Hewlett commented connected the actions that took spot against the crypto firms accused of Ponzi-like operations. “The DFPI volition proceed to support California consumers and investors from crypto scams and frauds,” Hewlett remarked. “These actions not lone support consumers, but besides guarantee California remains the premier planetary determination for liable crypto plus companies to commencement and grow,” the commissioner added.

What bash you deliberation astir the California regulator cracking down connected 11 antithetic crypto companies? Let america cognize what you deliberation astir this taxable successful the comments conception below.