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Cryptocurrency

This archive displays posts tagged as relevant to cryptocurrency, including Bitcoin and others. You may also be interested in the following pages:

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Top Ten SEC and CFTC Recoveries of 2022

Posted  02/1/23
stock market numbers
In 2022, the SEC and CFTC redoubled their efforts to preserve market integrity and shut down financial frauds.  Both in size and composition, the agencies’ major recoveries look quite different from a year prior.  2021 was all about crypto, with four of the top ten recoveries relating to crypto offerings or exchanges.  With the recent collapse of the crypto market—exposing some of the biggest frauds since the...

January 19, 2023

Cryptocurrency company Nexo Capital Inc. has agreed to pay $22.5 million and comply with a cease and desist order in order to settle SEC charges of failing to register the offer and sale of its retail crypto asset lending product.  The company has agreed to pay another $22.5 million and comply with additional terms in order to settle similar charges in California, Indiana, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, Washington, and Wisconsin.  As part of those additional terms, Nexo must notify all remaining U.S. investors to withdraw all remaining assets from Nexo’s platform by April 2023.  SEC, AG NY

Top Ten Money Laundering Enforcement Actions of 2022

Posted  01/10/23
person following a trail of money
2022 was a big year for money-laundering enforcement.  It marked the first full year that the new FinCEN money laundering whistleblower office was up and running.  And, even more remarkably, by the end of the year, the FinCEN program expanded to welcome whistleblowers with information related to sanctions violations after Constantine Cannon attorneys called for this legal change following the Russian invasion of...

The Scale of Crypto Fraud

Posted  09/27/22
Hundred Dollars Bills and Crypto Coins
Whistleblower associate Liz Soltan, along with Alex Cala of Taxpayers Against Fraud, recently wrote about the massive scale of cryptocurrency fraud on the TAF blog. As use of crypto has increased, so too have scams. Between Jan. 31, 2021 and March 31, 2022, over 46,000 people made reports to the FTC about losing money in crypto fraud, with losses totaling over $1 billion. And that’s just victims who chose to make...

Crypto projects are toying with public funds. The False Claims Act will be a powerful tool in holding them to account

Posted  09/21/22
cryptocurrency and stocks
Last month, the Fairfax County Retirement System shared that they will be putting $70 million of their $6.8 billion fund into two crypto yield farming funds. In other words, pension money that allows teachers, firefighters, and police officers to retire will be invested into volatile digital tokens known as yield-farming projects. Yield-farming projects offer yields that are significantly higher than those...

September 19, 2022

Sparkster Ltd. and its CEO, Sajjad Daya, have agreed to pay $30 million to settle charges of offering and selling crypto asset securities called SPRK tokens that were not registered with the SEC and were not eligible for a registration exemption.  A crypto influencer, Ian Balina, was separately charged in federal court for promoting SPRK tokens on social media without disclosing that he received a 30% bonus on tokens he purchased in exchange for his posts, and for selling the tokens to an investing pool of around 50 individuals.  SEC

May 19, 2022

Sohrab “Sam” Sharma, Robert Farkas, and Raymond Trapani will disgorge over $40 million for raising more than $32 million from investors in their unregistered ICO of “CTR tokens” through their controlled entity, Centra Tech Inc. The fraudsters made material misrepresentations in their marketing of the tokens, including claiming partnerships with Visa, MasterCard, and The Bancorp; created fake executive bios; misrepresented the company’s viability; and manipulated trading in the tokens to generate interest. The three defendants have been sentenced to imprisonment in addition to the financial penalties levied. SEC

May 6, 2022

NVIDIA Corporation has agreed to a cease-and-desist order and to pay a $5.5 million penalty for violations of the Securities Act and the disclosure provisions of the Securities Exchange Act. NVIDIA failed to disclose cryptomining as a significant element of its material revenue growth, depriving investors of critical information related to the investment’s volatility. SEC

SEC Keeps Crypto Fraud in Its Sights Through Expanded Enforcement Team

Posted  05/4/22
The SEC announced on May 3 that it was dramatically expanding its Cyber Unit and renaming the team the Crypto Assets and Cyber Unit.  The newly enlarged team will now include fully 50 enforcement personnel. The expanded team shows that the SEC is continuing to see crypto fraud as a major enforcement priority.  As the number of digital currencies continue to grow and the increasing number of new investors in the...

March 10, 2022

The founders of cryptocurrency company Bitqyck, Bruce Bise and Samuel Mendez, have been sentenced to 8 years in prison for tax evasion, two years after an $8 million settlement with the SEC for charges of defrauding over 13,000 investors of $24 million.  According to the DOJ press release, Bise and Mendex each diverted over $4 million of investor funds for personal expenses, then underreported their income and failed to file corporate tax returns for Bitqyck.  USAO NDTX
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