SEC Calls Out Suspicious Crypto Companies Targeting Global Traders

The securities regulator added eight suspect crypto entities to its watchlist Thursday.

AccessTimeIconJan 22, 2021 at 2:07 a.m. UTC
Updated Sep 14, 2021 at 10:59 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The U.S. government's top investments watchdog flagged a series of unregistered cryptocurrency companies for apparently duping mostly international investors with false corporate information.

Of the 28 suspect investment firms the U.S. Securities and Exchange Commission (SEC) called out Thursday, CoinDesk found eight that appear to target would-be cryptocurrency investors. Some purport to be trusted newcomer trading hubs; others peddle their services to retirees. One even fashions itself as a law firm that can help against crypto fraud.

Flagged companies AxTrading-Investment, Passive Trade Plan, RetireWell Investors, Reclaws International Inc. and SmartCoins24 all offered cryptocurrency and blockchain services on their websites Thursday, CoinDesk found. Three other entities whose websites were down, BitminingFX, Cryptobravos and FXBitcash, also made the SEC's blacklist.

The entities' websites appear to mix welcoming rhetoric and sweeping claims in their efforts to woo investors. Passive Trade Plan's described itself as "a trusted authority on digital currency investing" while Smartcoins 24 promised to "trade the hottest coins of 2018."

"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," read the website for AxTrading-International.

The SEC said Thursday that investors have filed complaints against all 28 flagged entities. These firms "use misleading information to solicit primarily non-U.S. investors," SEC said. It said it added the firms to its warning list, called PAUSE, to help investors "avoid being a victim of fraud."

The SEC periodically warns the investing public against too-good-to-be-true opportunities in the cryptocurrency space. Previous notices have detailed fraud in Initial Exchange Offerings and cases of public companies pumping their value with initial coin offerings. Back in 2014, the agency warned that investors should avoid getting swept up in the bitcoin hype machine.

Those clear-eyed warnings may take a sharper form with a new securities sheriff likely coming to Washington. President Joe Biden has tapped Gary Gensler, the crypto-savvy former head of fellow investments regulator the Commodities and Futures Trading Commission, to lead the SEC.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.



Read more about