{"id":7461,"date":"2022-09-28T11:51:48","date_gmt":"2022-09-28T11:51:48","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=7461"},"modified":"2022-09-28T11:51:49","modified_gmt":"2022-09-28T11:51:49","slug":"california-launches-crackdown-on-11-crypto-firms-accused-of-operating-ponzi-schemes","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=7461","title":{"rendered":"California Launches Crackdown on 11 Crypto Firms Accused of Operating Ponzi Schemes"},"content":{"rendered":"<p> <script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<\/p>\n<p><strong>The California Department of Financial Protection and Innovation (DFPI) has cracked down on 11 cryptocurrency companies that are accused of violating California securities laws. Nine of the firms reportedly solicited funds from investors in order to trade cryptocurrencies on the customer\u2019s behalf. One of the accused companies pitched an alleged metaverse software development scheme, and another firm claimed to be a \u201cdecentralized finance (defi) platform.\u201d<\/strong><\/p>\n<h2>11 Crypto Firms Targeted by California\u2019s Department of Financial Protection and Innovation<\/h2>\n<p>California\u2019s financial regulator the DFPI has been targeting crypto asset companies and on Tuesday, the financial watchdog launched a \u201ccrackdown\u201d against close to a dozen digital currency-centric entities. The DFPI \u201cissued desist and refrain orders against 11 different entities for violations of California securities laws,\u201d the regulator said on September 27. The state\u2019s regulator further noted that the operations are accused of running a pyramid or Ponzi scheme.<\/p>\n<\/p>\n<p>\u201cThe entities are all alleged to have used investor funds to pay purported profits to other investors, in the manner of a Ponzi scheme,\u201d the DFPI\u2019s press release notes. \u201cFurthermore, each of the entities had a referral program that operated in the manner of a pyramid scheme. The entities promised to pay investors commissions if they recruited new investors, and additional commissions if the investors that they recruited, in turn, recruited new investors.\u201d<\/p>\n<p>The DFPI\u2019s crackdown follows the cease and desist order it sent to the crypto lender Nexo on Monday. Nexo is accused of offering and selling \u201cunqualified securities, in the form of Earn Interest Product accounts,\u201d since \u201cat least June 2020,\u201d the regulator\u2019s complaint details. The 11 desist and refrain orders issued on Tuesday detail that the entities allegedly offered \u201cclassic examples of high yield investment programs (HYIPs).\u201d The 11 crypto companies named in the desist and refrain orders include:<\/p>\n<p>Cryptos OTC Trading Platform Limited d\/b\/a COTP<br \/>\nElevate Pass LLC<br \/>\nGreencorp Investment LLC<br \/>\nMetafiyielders Pty Ltd d\/b\/a Metafi Yielders<br \/>\nPegasus<br \/>\nPolinur ME Limited<br \/>\nRemabit<br \/>\nSity Trade<br \/>\nSytrex Trade<br \/>\nVexam Limited<br \/>\nWorld Over the Counter Limited d\/b\/a World OTC<\/p>\n<p>During the announcement on Tuesday, DFPI commissioner Clothilde Hewlett commented on the actions that took place against the crypto firms accused of Ponzi-like operations. \u201cThe DFPI will continue to protect California consumers and investors from crypto scams and frauds,\u201d Hewlett remarked. \u201cThese actions not only protect consumers, but also ensure California remains the premier global location for responsible crypto asset companies to start and grow,\u201d the commissioner added.<\/p>\n<p>Tags in this story<\/p>\n<p>11 crypto firms, california, California regulator, Clothilde Hewlett, Consumers, Crackdown, crypto pyramid, Cryptos OTC Trading Platform, Department of Financial Protection and Innovation, DFPI, DFPI Commissioner, Elevate Pass, GreenCorp Investment, Metafi Yielders, Nexo, Pegasus, Polinur ME Limited, Ponzi, Ponzi Schemes, Pyramid, Regulation, regulator, Regulators, Remabit, Sity Trade, Sytrex Trade, Vexam Limited, World OTC, World Over the Counter<\/p>\n<p><em><strong>What do you think about the California regulator cracking down on 11 different crypto companies? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n<p>Jamie Redman <\/p>\n<p class=\"article__body__author__info__about\">\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.<\/p>\n<p><i class=\"td-icon-font td-icon-twitter\"\/><\/p>\n<p class=\"images_credits\"><em>Image Credits: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n<p><strong>Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<p>More Popular NewsIn Case You Missed It<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/news.bitcoin.com\/california-launches-crackdown-on-11-crypto-firms-accused-of-operating-ponzi-schemes\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The California Department of Financial Protection and Innovation (DFPI) has cracked down on 11 cryptocurrency companies that are accused of violating California securities laws. Nine of the firms reportedly solicited funds from investors in order to trade cryptocurrencies on the customer\u2019s behalf. One of the accused companies pitched an alleged metaverse software development scheme, and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7462,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[1],"tags":[],"class_list":["post-7461","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-updates"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/7461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7461"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/7461\/revisions"}],"predecessor-version":[{"id":7463,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/7461\/revisions\/7463"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/7462"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}