Regulation is coming: SEC commissioner slams ICO industry

Regulation is coming: SEC commissioner slams ICO industry

The U.S. Securities and Exchange Commission (SEC) has been intensifying its rhetoric around regulating initial coin offerings (ICOs) in recent months, as the regulator increasingly turns its attention to token crowdsales and the wider cryptocurrency space.

Now, in one of the starkest official criticisms to date, a serving commissioner at the securities regulator has criticised the current state of the ICO space, suggesting investors are currently finding it difficult to separate genuine opportunities from opportunistic scams and frauds.

SEC Commissioner Robert Jackson said the current situation with ICOs was the reason the SEC exists in the first place.

“Investors are having a hard time telling the difference between investments and fraud…If you want to know what our markets would look like with no securities regulation, what it would look like if the SEC didn’t do its job? The answer is the ICO market,” Jackson told CNBC.

Citing “troubling developments” in the sector, he continued to say the commission’s priority was to protect investors who might be drawn in: “Right now we are focused on protecting investors who are getting hurt in this market.”

However, Jackson was more optimistic about the future for ICOs, which he sees as inevitably subject to existing US securities laws, telling the news outlet: “Down the road, I think we will be thinking about ways to make those investments work consistent with our securities laws.”

Jackson’s comments come in the wake of several other high profile announcements from US authorities around ICOs and cryptocurrencies. A divisional director of the SEC confirmed at a hearing in the House of Representatives last week that the securities regulator has been working towards a regulatory framework for ICOs, while a former executive from the CFTC confirmed his personal view that many ICOs, including those for cryptocurrencies like Ripple’s XRP and ETH, could ultimately be found to be securities.

It seems inevitably at this stage that the SEC will look to introduce firmer regulation around ICOs and new cryptocurrency tokens. It remains to be seen whether this will help reduce instances of fraud and deception, already too prominent with investments of this kind.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
IBITX draws SEC ire over questionable crypto operations

IBITX draws SEC ire over questionable crypto operations

True to its assertion that it would begin an industry-wide crackdown on cryptocurrency-related companies, the U.S. Securities and Exchange Commission (SEC) has set its sights on another business. This time, the securities regulator has temporarily suspended all trading activities of IBITX Software.

The company was operating the IBITX over-the-counter (OTC) exchange as a “Dynamic new type of currency exchange which matches new Initial Currency Offerings (ICOs) and those interested in buying those currencies in a single platform.” It boasted of being one of the first cryptocurrency exchanges that brought together a fiat-to-crypto platform and crowd sales. It had been trading on the OTC Markets under the symbol IBXS and had a market cap of around $143 million before being suspended.

IBITX is registered as a New York corporation, but lists its primary place of business as the Philippines. The SEC took the decision to suspend the company due to the accuracy of unspecified information found in company press releases and disclosure statements that were published for investors.

One possible source of the SEC’s ire could come from a press release issued by the company on April 9. In it, IBITX announced the creation of cryptocurrency exchange software that could be licensed to financial service providers, brokerage houses and jurisdictions where cryptocurrency trading is allowed. The software purportedly offered the receiving companies the ability to create its own coins and ICOs, and gave the impression that these were automatically authorized for release without additional registration with the SEC.

SEC’s suspension order went into effect on April 23, and will end on May 4.

The SEC is beginning to take a seriously hard look at all companies in the cryptocurrency industry, especially those that offer ICOs. Several private companies, as well as exchanges, have already come under fire this year, and there are reports that the agency is working on “several dozen” more cases. After having its annual budget increased by 3% this year, the SEC is already finding ways to spend the extra funds.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Third man in Mayweather-backed $32M ICO faces fraud charges

Third man in Mayweather-backed $32M ICO faces fraud charges

In a further debacle for the initial coin offering (ICO) sector, the U.S. Securities and Exchange Commission has announced additional fraud charges stemming from its investigation into Centra Tech’s $32 million token crowdsale.

One of Centra’s co-founders, Raymond Trapani, was charged with violating the anti-fraud and registration provisions of the federal securities laws in connection with the 2017 ICO, in which the company issued CTR tokens to investors. Centra’s two other founders, Sohrab Sharma and Robert Farkas, have already been charged for their participation in the alleged fraud.

In a statement, SEC Enforcement Division’s Cyber Unit Chief Robert Cohen said the three “went to great lengths to create the false impression that they had developed a viable, cutting-edge technology.”

Sadly, this is only one of many Ponzi-like situations which cryptocurrency investors have found themselves in—one recalls the Bitconnect and USI-Tech schemes, in which millions have reportedly been lost to alleged fraud with ongoing lawsuits likely to drag o for years.

In its charge sheet, the SEC claimed that Trapani was the main mastermind behind Centra’s ICO which was deemed to be fraudulent due to the fact that it made fictitious and untrue claims about its relationships with several major credit card companies that did not exist. The ICO depended heavily on celebrities and social media to market their scheme. Boxing champion Floyd Mayweather Jr. was one of the celebrities who were heavily paid to promote the ICO. He also endorsed Centra Tech in September, although his Instagram post has since been removed.

Trapani also allegedly created a fictional biography about his experience in the finance industry as well as false descriptions of the company’s products, according to investigators. The complaint also stated that both Trapani and Sharma entered into illegal trading to manipulate the price of the CTR tokens to generate interest and inflate the price artificially.

Another worrying aspect of the case is the uncovering of text messages sent between the shareholders to remove any references to a particular bank after receiving a cease and desist order: “[w]e gotta get that s[***] removed everywhere and blame freelancers lol.” And additionally, while trying to list the CTR Tokens on an exchange using false credentials, Trapani texted Sharma to “cook me up” a false document, prompting Sharma to reply, “Don’t text me that s[***] lol. Delete.”

The SEC’s complaint seeks permanent injunctions against Trapani, as well as the return of allegedly ill-gotten gains plus interest and penalties. It also seeks to prohibit Trapani from serving as a public company officer or director and from participating in any offering of digital or other securities.  In a similar action, the U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against Trapani.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Riot Blockchain comes under fire

Riot Blockchain comes under fire, faces NASDAQ delisting

Riot Blockchain jumped from biotech to blockchain in 2017, which resulted in its stock jumping, as well. Now, the company is being called to the carpet after the U.S. Securities and Exchange Commission (SEC) sent a subpoena, warning Riot that it is facing possible removal from NASDAQ for not adhering to policies.

In a public filing, Riot revealed that the securities regulator wanted to know the amount and classification of the company’s assets. The filing went on to say, “The Company believes that many companies engaged in blockchain and cryptocurrency businesses have received subpoenas from the SEC which presents an additional industry risk. The existence of an investigation of the Company specifically and the industry generally could have a materially adverse effect on the Company, its business or operations, and the industry as a whole.”

Later in the filing, Riot addressed the issue of possibly being delisted from NASDAQ, the tech stock index. Riot mentioned that it had been given a “Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard from NASDAQ.” In order to remain on NASDAQ, companies must conduct an annual shareholders meeting. Riot was supposed to hold the meeting prior to the end of 2017, but failed to comply. NASDAQ has now given the company an extension until May 15, but Riot announced in the filing that it doesn’t believe it will be able to meet the deadline, stating, “There is no assurance that we will be able to garner a quorum for the reconvened meeting. If no shareholders meeting is then held, we will likely be delisted from NASDAQ.”

Riot was previously a diagnostic equipment maker for the biotech industry. When it announced last year that it was getting into blockchain, its stock shot up and more than doubled. Now, as a result of the two announcements, it’s down again. The price fell 5% on Wednesday to $6.91, marking an 85% freefall from the company’s high of $46.20 last December.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Simple Agreement for Future Transactions is anything but simple

Simple Agreement for Future Transactions is anything but simple

First there was SAFE, the “simple agreement for future equity.” It was created to enable startup companies to provide an investment vehicle that works the same as a convertible note, but isn’t a debt instrument. It’s an agreement that allows an investor to purchase stock in a future equity round following an initial investment. Now, cryptocurrencies have their own version, SAFT, which is proving to be anything but simple.

SAFT stands for Simple Agreement for Future Transactions. It works the same as a SAFE, but is designed with digital currencies in mind. According to SAFT proponents, “In the U.S., the SAFT itself is a security, so it could be offered in a private placement to accredited investors. The tokens that are ultimately delivered to the investors, though, should be fully-functional, and therefore not securities under U.S. law. The SAFT is a security. It demands compliance with the securities laws. The resulting tokens, however, are already functional, and need not be securities under the Howey test. They are consumptive products and, as such, demand compliance with state and federal consumer protection laws.”

While, in theory, a SAFT seems to be a valid solution to a rising problem, it doesn’t go much further. The U.S. Securities and Exchange Commission (SEC) hasn’t given SAFTS its blessing, which can lead to legal difficulties for both companies looking to issue SAFTS, as well as investors. To make matters worse, SAFTS were created by lawyers, even though SAFTS have no legal precedent upon which they’re constructed.

There are currently more than 200 cryptocurrency funds being offered, an increase of 90 since October of last year. Everyone who has spent more than six months in the cryptocurrency world knows that there aren’t any guarantees when returns are discussed, but when people start throwing around ideas like SAFTS and showing the growth of crypto over the past two years, the lesser educated could be duped into investing more than he or she should.

Strictly by the numbers, hedge funds earned around 8.25% in January. This compares to a loss of 4.6% seen through cryptocurrency hedge funds. However, with so much hype circulating around Initial Coin Offerings (ICO) and exponential returns, there’s a fine line between what’s really happening and what can happen.

Without a doubt, the SEC is looking to crack down on cryptocurrencies and ICOs starting this year. They have only issued a small amount of warnings, but there are now apparently dozens of investigations in the works. While SAFTS might have their place among crypto, it won’t happen without regulatory intervention in the U.S., as well as in other countries.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
UK man linked to $36M Bitcoin scam extradited to US

UK man linked to $36M Bitcoin scam extradited to US

After being on the lam for a couple of years, a British man linked to cryptocurrency fraud has been brought back to the United States to face a judge. Renwick Haddow exchanged his Mediterranean home for a New York jail cell and is looking at two charges of wire fraud, the U.S. Department of Justice announced last Friday. If everything goes well, he could be sentenced to up to 40 years in prison.

Haddow, 49, is accused of syphoning off over $36 million from clients who were suckered into investing in his two outfits, Bitcoin Store and Bar Works. He reportedly hired a team of sales agents who called on potential clients to convince them to invest in the companies. According to a complaint lodged by the Securities and Exchange Commission (SEC), Haddow funneled around 80% of the funds to his own accounts, and sent $1 million to a bank account in Morocco and over $4 million to bank accounts in Mauritius.

The SEC asserts that the two companies never really existed. Haddow, who went by the name of Jonathan Black in the businesses, concocted false entities, including fake executives and grossly exaggerated earnings. The director of the SEC’s New York Regional Office, Andrew M. Calamari, explained, “As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability.  In reality, Haddow controlled the companies from behind the scenes and they were far from profitable.”

Haddow created propaganda that claimed Bitcoin Store was “an easy-to-use and secure way of holding and trading Bitcoin,” investigators said. He reportedly told potential investors that the company had already picked up several million dollars, which, according to the SEC, was a blatant lie, as no records exist of the company ever having received that money. Bitcoin Store did receive money, under $250,000 in incoming payments, but paper trails revealed that none of the money came from paying customers.

The arrest warrant for Haddow was issued in July 2017. He will be tried in the Southern District Court of New York, and each count of wire fraud carries a sentence of up to 20 years. Here’s lookin’ at you, kid.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Unregistered cloud mining operations face up to 21 years' prison time

Unregistered cloud mining operators face up to 21 years’ prison time, Philippine SEC warns

Even recruiters will not be spared from prosecution, SEC says.

Amid the rising number of businesses—both legitimate and dubious—in the cryptocurrency space, cloud mining operators have triggered alarm bells and are now on the Philippine Securities and Exchange Commission’s (SEC) radar.

In a release, the SEC has issued a warning to unregistered cloud mining operators—including their agents.

“The Commission has detected that certain individuals or groups of persons are enticing the public, through a popular social media platform or in their own independent websites, to invest in so-called cloud mining contracts,” the SEC wrote on their website. The warning mentions both local and foreign firms who solicit investors from the Philippines.

According to the SEC, such contracts can be classified as securities, and will therefore be subject to securities laws—they have to be registered and those soliciting these investments required to be licensed to operate.

“Applying the Howey Test as discussed by the Honorable Supreme Court in Power Homes Unlimited vs. SEC (G.R. No. 164182, February 26, 2008), a cloud mining contract is an investment contract falling within the purview of the term “securities” as defined by law,” the warning stressed.

The SEC explains that the activity ticks all the check boxes for securities: there is the requirement of investment money, the collected investment money is pooled to purchase mining equipment for profit, there is expectation of profit, and the distributed profits are generated from others people’s (cloud mining operators) efforts.

The SEC warns that violators can be prosecuted, and that even agents promoting such activities and recruiting others to engage in these activities are not exempt from prosecution.

“Likewise, those who act as salesmen, brokers, dealers or agents of these companies in selling or convincing people to invest in the investment scheme being offered by these cryptocurrency mining companies including solicitations and recruitment through the internet without the necessary license or authority from the Commission may likewise be prosecuted and held criminally liable under Section 28 of the Securities Regulation Code and penalized with a maximum penalty of twenty-one (21) years of imprisonment or both pursuant to Section 73 of the SRC.”

The SEC ultimately discourages people from investing in activities by unregistered entities. At a time when it’s easy to fake websites and profiles, get-rich-quick schemes and cons have become rampant. Several websites have instigated scams, collecting money from ill-informed “investors” and disappearing shortly after.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Telegram considers cancelling its ICO

Telegram considers cancelling its ICO

Rumors have begun to surface that indicate Telegram might back away from its ongoing initial coin offering (ICO). It’s still early in the game, with plenty of time remaining before the final buzzer, but a couple of flags have already been thrown. If it were to come to pass, it would prove to be a huge setback for the social media platform that has become the go-to application for the cryptocurrency community.

One big reason that it might be contemplating turning around is, unsurprisingly, potential pushback from the U.S. Securities and Exchange Commission (SEC). According to Telegram’s SEC filings, it is selling securities, and has already raised $1.7 billion. However, under SEC guidelines, it is prohibited for a company to sell securities to non-accredited investors, with limited exceptions.

Telegram would also have to go through its own verification process. It would have to show that it conforms to anti-money laundering regulations, as well as clear a know-your-customer (KYC) application. A known, established investor wouldn’t have any issue being confirmed, or accredited. However, for the multitude of individuals that have never stepped into the investment ring, each one would have to be verified.  This amounts to a massive amount of paperwork for Telegram.

Another reason is the lack of a tangible product or service. The Telegram blockchain, the Telegram Open Network (TON), currently only exists on paper. By the letter of the law, then, Telegram is offering nothing more than the “dream” of a future network. This is highly frowned upon the SEC, and other companies have already found themselves in hot water with the agency for similar acts.

Sid Kalla of the Turing Advisory Group indicates that it would be prudent for Telegram to back up, build the product and then move forward with the ICO. In an interview with CoinDesk, he said, “The private sales were raised at around the top of the market euphoria. For a public valuation to reach back to those levels, the crypto community would need to see something concrete.”

Telegram is now 5 years old. While it has certainly gathered a lot of business intelligence over this time, that intelligence does not necessarily translate into investment intelligence. It more than likely doesn’t have the resources or maturity to handle investor relations issues that could arise following a public ICO.

Telegram has been relatively quiet on the subject, and there are some that don’t believe a recall is imminent, or even forthcoming. Kalla indicated that there could be major drawbacks to reversing course at this point, adding that any future attempts at offering a public-backed product would more than likely result in investors demanding lower prices for Telegram’s digital currency. “The only reason I see a public token sale making sense if there is investor demand or pressure or any contractual obligation for liquidity,” he said.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Coinbase seeks SEC license for brokerage

Coinbase seeks SEC license for brokerage

Cryptocurrency trading platform Coinbase has applied to the U.S. Securities and Exchange Commission (SEC) for a license to offer brokerage and electronic trading services, according to reports.

Last week, the Wall Street Journal reported that the San Francisco-based firm have met with regulators in recent weeks as it begins the process of applying for the required licenses.

Crucially, the licensing would enable Coinbase to list a number of other tokens, including those previously ruled by the SEC to be securities, and could open up a raft of new token and cryptocurrency markets on the Coinbase platform.

Valued at over $1.6 billion, Coinbase is the leading platform for buying cryptocurrencies like SegWit-Coin BTC (also known as Bitcoin Legacy or Core) and Bitcoin Cash. If the license is to be granted, and Coinbase predictably follows through on listing an array of new tokens and cryptocurrencies, it could be the trigger for other platforms to follow suit.

As far as cryptocurrencies are concerned, the SEC has remained vague on what is and isn’t to be classed as a security. As guidance, the agency recommends following the Howey test, derived from a Supreme Court ruling in 1946, which provides that (1) there is an investment of money, (2) an anticipated profit from the investment, (3) that the investment is in a common enterprise, and (4) that the profits are derived from the efforts of a third party.

The definition matters, because platforms like Coinbase run the risk of falling foul of securities laws, unless they are licensed and regulated to engage in securities brokerage.

On the license being granted, Coinbase will only be permitted to list tokens that have been registered with the SEC by their issuers, which means investors will have access to full financial disclosures, unless they are limited to institutional investors only.

Coinbase President Asiff Hirji said removing the uncertainty in the current regulatory structures would allow Coinbase, and by extension other platforms, to offer a broader range of assets.

“As soon as there is more regulatory clarity than there currently is you would expect us to start listing more assets,” Hirji told CNBC.

As the Coinbase application unfolds, it is expected that other exchanges will likely follow suit to remain competitive across potential new, regulated token markets.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
SEC considers listing more Bitcoin ETFs on NYSE Arca

SEC considers listing more Bitcoin ETFs on NYSE Arca

More Bitcoin exchange-traded funds (ETFs) are reportedly closer to being listed on NYSE Arca, the first all-electronic exchange in the United States.

According to documents made public by the U.S. Securities and Exchange Commission, two Bitcoin ETF proposals are being considered. The main point to be discussed and debated is whether Pro Shares can list two exchange traded funds on NYSE Arca.

It is intriguing to note that ProShares Bitcoin ETF and ProShares Short Bitcoin ETF will be holding Bitcoin futures contracts for trading. This will enable retail investors to invest directly in SegWit-Coin BTC (also inaccurately referred to as Bitcoin Legacy or Core). ProShares Short Bitcoin ETF will also enable investors to “short” SegWit-Coin BTC, which, as we all know, could have a considerable negative effect on the price. At the moment, SegWit-Coin BTC has been trading perilously close to its historic 2018 low of $5,800—at around $6,500 having lost almost 15% in value from last Monday when the price was briefly flirting with the $7,500 mark.

In its order, the SEC said it “is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change.”

This is not the first time that ProShares had proposed to list its ETFs. In September, when the cryptocurrency had started its bull run, the company had already proposed listing its shares on the NYSE Arca. However, they were pipped to it by other funds that eventually listed in December with the consequent negative consequences on the cryptocurrency. Apparently, the SEC had requested for the owners of the fund to withdraw their applications as investor protection had not yet been put in place.

Cboe President Chris Concannon recently wrote to the SEC proposing that Bitcoin ETF proposals should be considered on a case-by-case basis, which makes them different than a particular product class. Concannon said that Cboe had already managed to close several successful rounds of Bitcoin futures with the market maturing at a steady pace. This would make it eligible for a regulated ETF in the not too distant future, according to Concannon.

According to the SEC guidelines, the rule changing these futures listings has to be published in the Federal Register, with the public allowed 21 days to comment and another 14 days to submit any rebuttals.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

source: https://coingeek.com/sec-considers-listing-bitcoin-etfs-nyse-arca/

SEC shuts down Mayweather-backed ICO over fraud charges

SEC shuts down Mayweather-backed ICO over fraud charges

Startup Centra Tech is on its death bed after the U.S. Securities and Exchange Commission (SEC) charged its two founders with orchestrating a fraudulent initial coin offering (ICO). Sohrab Sharma and Robert Farkas, the co-founders of Centra Tech, were charged with selling unregistered securities to thousands of investors, raising more than $32 million in the process.

The securities regulator said Sharma and Farkas offered and sold unregistered investments through a “CTR token,” telling would-be investors that the funds raised in the token crowd sale would go towards building “a suite of financial products.” For instance, they claimed to create a Master Card- and Visa-backed debit card, allowing users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other available legal tenders. The truth, however, is that the ICO isn’t connected with the payment processing giants.

To promote the ICO, Centra Tech created fictional executives with very appealing biographies and also posted misleading marketing materials on its website. The ICO depended heavily on celebrities and social media to market their scheme. Boxing champion Floyd Mayweather Jr. was one of the celebrities who were heavily paid to promote the ICO. He also endorsed Centra Tech in September, although his Instagram post has since been removed.

“Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors,” said Steve Peikin, co-director of the SEC’s Division of Enforcement.

According to the SEC, Farkas made a flight reservation to leave the U.S. but was arrested before he could board his flight. Sharma was later arrested by law enforcement officers.

Sharma and Farkas were charged in New York with violating the anti-fraud and registration provisions of the federal securities laws.  The complaint seeks permanent injunctions, return of allegedly ill-gotten gains plus interest and penalties, as well as bars the two from serving as public company officers or directors and from participating in any offering of digital or other securities.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

source: https://coingeek.com/sec-shuts-mayweather-backed-ico-fraud-charges/

Cboe asks SEC to not interfere with Bitcoin exchange traded funds

Cboe asks SEC to not interfere with Bitcoin exchange traded funds

At the beginning of this year, the U.S. Securities and Exchange Commission (SEC) sent a letter to Paul Stevens and Timothy Cameron, heads of investment companies with an interest in cryptocurrencies. The letter was written to provide some insight into the SEC’s position on cryptocurrencies, as well as to solicit feedback on the subject. The publication of the letter prompted the president of the investment firm Cboe Global Markets, Chris Concannon, to make an appeal to the SEC to not get involved with the development of a Bitcoin exchange traded fund (ETF).

Concannon’s letter expressed his belief that the SEC needed to maintain a hands-off approach because the Bitcoin ETF functions similarly to other commodity-based ETFs. In the letter, Concannon explained, “As the volumes continue to grow, especially on regulated U.S. markets, the overall spot Bitcoin market looks more and more like a traditional commodity market and CBOE continues to believe that the spot market is sufficiently liquid to support a Bitcoin ETP.”

The five-page letter by the SEC stated, “We believe…that there are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors.” It then went on to ask for feedback on a list of questions before adding, “Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency.”

An ETF is an exchange-traded product that acts like a marketable security. It tracks indices, commodities and bonds the same way that an index fund does. They are also traded like common stock on an exchange and usually have higher liquidity and lower fees than do mutual funds.

Whether or not the SEC will respect the request remains to be seen. However, the agency is starting to take a hard look at all cryptocurrency-related activity. It is currently investigating a number of companies and has issued subpoenas to those entities it feels are trying to circumvent securities regulations in the country. Since the SEC was awarded an increased budget by U.S. President Donald Trump, receiving 3% more than it had asked for, there’s a good chance that more fallout will be seen down the road.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

source: https://coingeek.com/cboe-asks-sec-not-interfere-bitcoin-exchange-traded-funds/