The United States Securities and Exchange Commission (SEC) has been monitoring the cryptocurrency industry since its inception and it has successfully managed to mitigate illicit activities and fraudulent business. As such, the SEC often tends to list these businesses on its watch list. Recently, the regulator has added 28 unregistered cryptocurrency companies that are apparently duping international investors with misleading information.
Among the 28 firms flagged by the regulator on Thursday, eight of the companies seem to target future cryptocurrency investors. Some pretend to be trusted trading platforms for new investors entering the crypto market, while others try to trick retirees.
One of the firms even described itself as a law firm that helps against crypto fraud.
Some of the companies, namely, xTrading-Investment, Passive Trade Plan, RetireWell Investors, Reclaws International Inc. and SmartCoins24 offer crypto and blockchain-based services on their website. Meanwhile, Flagged companies BitminingFX, Cryptobravos, and FXBitcash had their websites down.
These companies make claims that are too good to be true, but seem legitimate at the same time. Passive Trade Plan fashioned itself as “a trusted authority on digital currency investing” while Smartcoins 24 promised investors to “trade the hottest coins of 2018.”
AxTrading-International’s website read:
“Our bitcoin trading services is suitable for those who are new to the world of cryptocurrencies, as well as for bitcoin experts and large-scale bitcoin investors.”
The SEC has added that several investors have filed complaints regarding all the 28 firms that were added to its watchlist. These firms “use misleading information to solicit primarily non-U.S. investors,” SEC said. The regulator stated that it added the firms to its warning list, called PAUSE, to help investors “avoid being a victim of fraud.”
The SEC has been periodically warning the public about opportunities that seem too unreal in the cryptocurrency space. Previously, the SEC has cracked down on several fraudulent cases involving Initial Coin Offerings, and cases of Public companies manipulating the price of its ICO.
New SEC Chief incoming
As previously reported by The Daily Chain, the SEC is also set get a new leader as reports have emerged that President-Elect Joe Biden has nominated former CFTC Chief Gary Gensler as the new SEC Chairman.
Gensler is a well-known figure in the crypto space, especially in the academic area. With his experience with digital currencies, these warnings from the SEC might soon take a sharper form.
