all about cryptop referances
The California Department of Financial Protection and Innovation (DFPI) has cracked down on 11 cryptocurrency companies accused of violating California securities laws. Nine of the firms are said to have solicited funds from investors to trade cryptocurrencies on their clients’ behalf. One of the accused companies laid out an alleged metaverse software development plan, and another firm claimed to be a “decentralized finance (defi) platform.”
California’s financial regulator, DFPI, has been targeting companies with crypto assets, and on Tuesday the financial watchdog launched a “crackdown” against nearly a dozen digital currency-centric entities. DFPI “issued cease and desist orders against 11 different entities for violating California securities laws,” the regulator said on September 27. The state regulator further noted that the operations are accused of running a pyramid or Ponzi scheme.
“The entities are all said to have used investor funds to pay alleged profits to other investors, similar to a Ponzi scheme,” DFPI’s press release states. “Additionally, each of the entities had a referral program that operated similarly to a pyramid scheme. The entities promised to pay investors commissions if they recruited new investors, and further commissions if the investors they recruited in turn recruited new investors.”
DFPI’s intervention follows the cease and desist order it sent to crypto lender Nexo on Monday. Nexo is accused of offering and selling “ineligible securities, in the form of earn interest product accounts,” since “at least June 2020,” the regulator’s complaint details. The 11 cease and desist orders issued on Tuesday describe the entities as allegedly offering “classic examples of high yield investment programs (HYIPs).” The 11 crypto companies named in the cease and desist orders include:
During the announcement on Tuesday, DFPI Commissioner Clothilde Hewlett commented on the actions taking place against the crypto firms accused of Ponzi-like operations. “DFPI will continue to protect California consumers and investors from crypto fraud and scams,” Hewlett said. “These actions not only protect consumers, but also ensure that California remains the premier global location for responsible crypto-asset companies to start and grow,” the commissioner added.
What do you think about the California regulator cracking down on 11 different crypto companies? Let us know what you think about this topic in the comments section below.
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