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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:

Page 5 of 9

March 19, 2021

The CFTC has ordered digital asset exchange operator Coinbase Inc. to pay a civil monetary penalty of $6.5 million to settle charges of reporting false, misleading, or inaccurate information on the company’s GDAX electronic trading platform, which is published by various reporting firms and used by market participants to gauge the volume and liquidity of digital assets.  The CFTC also found Coinbase vicariously liable for a former employee who placed deceptive orders in Litecoin in order to artificially generate market interest.  CFTC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations,

March 4, 2021

Sohrab Sharma, a co-founder of Centra Tech, which claimed to offer products including a debit card that would allow users to make retail purchases using cryptocurrency, has been sentenced to eight years in prison following his guilty plea to charges arising from Centra’s fraudulent representations to participants in its unregistered initial coin offering of “Centra Tokens” or “CTR tokens,” which raised more than $25 million from victims.  Sharma and his co-defendants falsely claimed that Centra Tech had an experienced executive team, agreements with card issuers, and licenses to operate in 38 states when, in fact, Centra Tech had none of these things.  USAO SDNY

Tagged in: Criminal Proceedings, Cryptocurrency, Financial and Investment Fraud, Regulatory Violations, Securities Fraud,

February 23, 2021

Cryptocurrency trading platform Bitfinex, operated by iFinex, and Tether were ordered to end all trading activity for NY customers and agreed to pay $18.5 million in penalties following an investigation into their handling of customer deposits and withdrawals that resulted in the loss of hundreds of millions of customer assets.  Tether was found to have falsely represented that each of its stablecoins was backed one-to-one by U.S. dollars in reserve when, in fact, they were not.  NY

Tagged in: Cryptocurrency, Financial and Investment Fraud, Financial Institution Fraud,

Top Ten SEC and CFTC Recoveries of 2020

Posted  01/15/21
top ten list
Despite its many shortcomings, 2020 did bring great news for whistleblowers: record-breaking growth in the CFTC and SEC Whistleblower Programs, as well as massive enforcement actions by both agencies.  In this post, we will detail the Top Ten SEC and CFTC recoveries of 2020 in cases other than FCPA enforcement.  As detailed below, the SEC netted billions of dollars in penalties and restitution from companies accused...

Tagged in: Accounting Fraud, CFTC Whistleblower Reward Program, Cryptocurrency, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations, SEC Whistleblower Reward Program, Securities Fraud, Top 10,

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January 11, 2021

Steve Chen was sentenced to 10 years in prison following his guilty plea to charges arising from his promotion of a pyramid/Ponzi scam that netted $147 million from tens of thousands of investors.  Chen told victims that they could purchase interests in U.S. Fine Investment Arts, Inc. and other companies owned by him, falsely claiming that those companies mined and sold amber and other gemstones, and enlisted those investors to recruit others by awarding them bonuses and “Gem Coins” that he claimed were a digital currency.  USAO CD Cal

Tagged in: Criminal Proceedings, Cryptocurrency, Financial and Investment Fraud, Ponzi Schemes,

October 21, 2020

Cryptocurrency issuer Kik Interactive Inc. will pay a $5 million penalty in a consent judgment resolving claims by the SEC that Kik’s unregistered offering of digital “Kin” tokens in 2017 violated U.S. securities laws.  The consent judgment finds that Kin tokens were investment contracts and the offering did not qualify for any exemption from registration requirements.  Kik sold the tokens through both public and private sales; the court found that the sales were a single integrated offering.   SEC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Regulatory Violations, Securities Fraud,

October 2, 2020

Jon Barry Thompson of Pennsylvania has been ordered to pay approximately $7.4 million in restitution for making false representations to two customers regarding purchases of Bitcoin.  According to the CFTC press release, Thompson induced the customers to send him the funds by assuring them he had the Bitcoin in hand.  However, after receiving the funds, he distributed the money to third parties, failed to provide the customers with any Bitcoin, and made false representations regarding the location of the Bitcoin and the status of the funds.  Thompson pleaded guilty to one count of commodities fraud in a parallel action relating to this matter, and will be sentenced in January 2021.  CFTC

Tagged in: Criminal Proceedings, Cryptocurrency, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations,

September 15, 2020

Online gaming and gambling platform Unikm, Inc. agreed to pay a $6.1 million penalty to resolve allegations that the company unlawfully sold unregistered securities in its initial coin offering of “UnikoinGold” (UKG) tokens.  The recovered funds will be used to repay injured investors.  SEC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Regulatory Violations,

June 26, 2020

Telegram Group Inc. and its subsidiary TON Issuer Inc. will return more than $1.2 billion to investors and pay a $18.5 million civil penalty to resolve SEC charges that it conducted an unlawful unregistered offering of its digital tokens called “Grams.” The SEC alleged that the Grams were securities sold by defendants in order to raise capital to finance for their own business, which included the development of their own blockchain and a mobile messenger application.  SEC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Regulatory Violations, Securities Fraud,

May 28, 2020

Blockchain company BitClave PTE Ltd agreed to pay disgorgement, penalties, and interest totaling $29.7 million to resolve charges arising from its 2017 unregistered initial coin offering of digital tokens it called Consumer Activity Tokens (CATs).  The CATs were investment contracts, with proceeds of the ICO used to fund the development of BitClave’s blockchain-based search platform for consumer advertising, which BitClave offered and sold to the general public as providing the opportunity for future profits arising from the efforts of BitClave and its agents.  SEC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Regulatory Violations, Securities Fraud,

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