US Regulators Take Down 90 Crypto Scams but Only Recovered $36 Million USD for Victims
Regulators from the United States have found out and taken down at least 90 cases of crypto scams since 2017. The borderless nature of these scams prevented the authorities from recovering most of the funds. Despite the fact that $36 million USD was brought back to the investors, this is considered not a lot of money since these fake businesses stole a lot more.
Another interesting aspect is that most of the scams were found out when the prices were low. In 2017, when crypto prices were skyrocketting, the U. S. Securities and Exchange Commission (SEC) was only able to file five cases and a lot more of them were filed this year.
The main issue is that most of the actions did not result in any kind of fund getting back to the investors who originally lost the money. Most of the time, the regulators were only able to shut the business down.
BitConnect was one of the most prominent frauds that the SEC found out. The company received a cease and desist order but only after it had reached a market value of over $2.8 billion USD.
The company was shut down by the Texas State Securities Board because it had offered securities that were unregulated for people based in Texas. Therefore, the authorities went to shut down the company to prevent more people from being tricked into buying the illegal assets of the scam.
BitConnect was accused of being involved in fraud and of concealing the identities of the people who run the company. The company also promised annual interest rates of over 120% and it was not able to explain how it would actually people that amount of money.
The lawsuits against these companies have also spiked during the year, which coincided with the raise in regulation within the industry. If the crypto market was the “wild west” in 2017, the regulation of 2018 prevented it from being lost to scammers.
Now, a lot more people are concerned with illegal investments and even Initial Coin Offerings (ICOs) are starting to be regulated, so we will certainly have a calmer 2019 than 2018 was.