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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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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

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...
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