WSJ Touches on 2017 Crypto Investor Craze, 2018 Scams and Regulators 90+ Cases Being Brought to Justice

In a recent report released by The Wall Street Journal, they rote that more than 90 cases have been brought by regulators against cryptocurrency and blockchain-related companies. The bull market in the space back in 2017 and the crash later in 2018 has harmed investors and raised regulatory concerns.

With these cases, regulatory agencies in the United States were able to recover around $36 million in investors’ funds that were going to be stolen or lost. During the bull market experienced by virtual currencies in 2017, several Initial Coin Offerings (ICOs) launched new platforms or blockchain projects. Several of these companies were fraud or just scams. Due to this situation, some countries such as South Korea or China banned Initial Coin Offerings in their territories.

According to The Wall Street, regulators brought more than 70 crypto-enforcement actions since they filed the first case around a year ago. Although this seems very positive, the regulatory agencies were not able to recover any investor funds lost to scammers.

As the crypto market plummetted, the SEC was able to increase the number of cases filed. Some companies were not able to sustain their operations but developers and founders of ICOs were able to make important purchases such as cars or homes. Just in November this year, the SEC was able to file five cases compared to four in all 2017.

Some of the most important cases that appeared in the news this year include BitConnect and AriseBank. BitConnect had to halt its operations earlier this year when the Ponzi and pyramid scheme that it was running collapsed. The firm promissed extraordinary returns to investors if they were able to bring new individuals to the platform. Furthermore, AriseBank has been accused of defrauding investors.

Regulatory clarity is very important for the crypto space and companies operating in it. In the future, it might be possible to have better regulations and clearer rules for both virtual currencies and crypto-related firms. There are some countries such as Malta and Japan that have already been creating clear regulatory frameworks for the blockchain and crypto space.

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