7 October 2022
California’s financial regulator the DFPI has listed down crypto asset companies and they have launched a “crackdown” against close to a dozen digital currency-centric entities. The regulator said that the DFPI “issued desist and refrain orders against 11 different entities for violations of California securities laws.” The state’s regulator further noted that the operations are accused of running a pyramid or Ponzi scheme.
According to the press release, “the entities are all alleged to have used investor funds to pay purported profits to other investors, in the manner of a Ponzi scheme. Furthermore, 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.”
On Monday, the crypto lender Nexo received the cease and desist. The company is accused of offering and selling “unqualified securities, in the form of Earn Interest Product accounts,” since “at least June 2020,” the regulator’s complaint details. The 11 desist and refrain orders issued on Tuesday detail that the entities allegedly offered “classic examples of high yield investment programs (HYIPs).”
The 11 crypto companies named in the desisting and refrain orders include: Cryptos OTC Trading Platform Limited d/b/a COT, Elevate Pass LLC, Greencorp Investment LLC, Metafiyielders Pty Ltd d/b/a Metafi Yielders, Pegasus, Polinur ME Limited, Remabit, Sity Trade, Sytrex Trade, Vexam Limited, and World Over the Counter Limited d/b/a World OTC.
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