Over 90 cryptocurrency fraud cases Filed in the last two years in the US
Cryptocurrency and its nature have been troubling investors for a decade now. Where some have made money from it, and some are still creating a considerable amount of wealth by dealing in cryptocurrencies like Bitcoin, other are getting trapped in fraudulent activities and losing a huge part of their hard-earned money.
The regulatory of the US have filed over 90 cases in these couple of years, which talk the same story of loss. Regulators at both state and federal stages have been able to get back US$36 million of the lost amount, which is just a part of the total loss. The nature of cryptocurrency which made it so famous has become the cause of this loss. Regulatory is lacking in finding recovering more money due to the anonymous and borderless nature of the crypto.
One study published in a well-known journal stated that the number of cases registered by the regulators was lesser during the bullish crypto market, the number of filed cases started increasing when the crypto market started falling. This can be proved by paying attention to the fact that, the previous year, regulators filed only four cases, however, last month the US Securities and Exchange Commission has registered five cases.
State regulators brought more than 70 crypto-enforcement actions last year. However, none of these actions have helped in recovering the lost money.
Among all the alleged frauds took place during these years, the one made by BitConnect was the most prominent. BitConnect is under legal investigation now. The Securities and Exchange Commission and regulators at the state level, both are investigating in the matter. BitConnect had to shut down its activities after Texas State Securities Board issued a cease-and-desist order on the company. The company had a market value of around US$2.8 billion at that time.
Texas State Securities Board accused the company of breaching some sections of the Texas Securities Act. These provisions do not allow the selling of any securities without the permission of the Securities Commissioner. Clearly, BitConnect failed to follow it.
Texas State Securities Board released a report while raising an accusation on BitConnect. The report said that the company is a part of fraudulent activities as it is not disclosing the identities of the company’s principals; plus, the company has not shown its way of generating revenue and how it is going to pay its investors the promised annual interest of 120%.