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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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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

SEC Hits Crypto Firm BlockFi with $100 Million in Penalties

Posted  02/22/22
Assorted Crypto Coins
The SEC recently announced cryptocurrency financial institution BlockFi agreed to pay $100 million to resolve charges it violated securities laws. Half the penalties will go to the SEC, and the other half will go to 32 states that brought similar charges. The settlement represents the largest recorded penalties the Commission has ever imposed on a crypto firm. It also sends a clear message the SEC will not shy away...

February 14, 2022

BlockFi, Inc. will pay a total of $100 million to resolve SEC and state claims arising from its sale to retail customers of cryptocurrency lending products, including its BlockFi Interest Accounts.  Through the “BIAs,” investors lent cryptocurrency assets to BlockFi in exchange for the company’s promise to provide a variable monthly interest payment.  The SEC alleged that the BIAs were securities, offered without registration, that BlockFi operated as an unregistered investment company, and made false and misleading statements about risk levels.  SEC

Top Ten SEC and CFTC Recoveries of 2021

Posted  01/7/22
Top Ten Sign with Letters
As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower ProgramsSeven of the ten largest whistleblower awards of 2021 were made to SEC and CFTC whistleblowers, including a massive $200 million CFTC award that was roughly twice as large as all prior CFTC awards combined.  In total, the SEC paid more awards—both in total dollars and individual...

Is the privatization of whistleblower programs a trend?

Posted  12/3/21
various cryptocurrency on table
Tether is a type of cryptocurrency known as a “stablecoin.”  That means, in theory, that anyone buying Tether is promised Tether holds an equal amount of U.S. currency to back up your crypto purchases.  There’s just one problem with that:  no one has seen any proof that Tether actually holds anywhere close to sufficient currency to back up the billions in stablecoins traded.  All Tether has offered is an...

October 15, 2021

iFinex Inc. and related entities doing business as cryptocurrency trading platform Bitfinex, agreed to pay $1.5 million to resolve charges that they operated as an unregistered futures commission merchant (FCM) and engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S. persons that were not eligible contract participants (ECPs).  The CFTC found that Bitfinex allowed margin trading financed through a peer-to-peer funding program through which Bitfinex customers who held fiat or cryptocurrency in their Bitfinex account would “lend” those funds to other Bitfinex customers who would then use those funds to buy, sell, and trade on the Bitfinex platform, in violation of a 2016 CFTC orderCFTC

October 15, 2021

Tether Holdings Limited and related entities, issuers of the “Tether Token” or USDt, have agreed to pay a civil monetary penalty of $41 million to resolve allegations that they violated the CEA and CFTC regulations by making untrue or misleading statements and/or omitting material facts through statements that Tether maintained sufficient U.S. dollar and other fiat currency reserves in bank accounts to back every USDt in circulation.  In fact, Tether did not hold sufficient currency reserves at all times.  The reserves were inadequate in amount, and were not held in currency in bank accounts, but instead included unsecured receivables and non-fiat assets, which were held by unregulated entities and third-parties including Bitfinex, which commingled reserve funds with operational and customer funds.  The CFTC also found that Tether failed to perform routine professional audits as represented.  CFTC

September 28, 2021

Payward Ventures, Inc., d/b/a Kraken has been ordered to pay a $1.25 million civil monetary penalty for violating the Commodity Exchange Act.  According to the CFTC, for a year ending in July 2021, Kraken illegally offered commodity transactions in retail assets, despite failing to register as a futures commission merchant.  CFTC
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