SEC Calls Suspicious Crypto Companies Targeting Global Traders

The US government’s main investment watchdog highlighted a series of unregistered cryptocurrency companies for doubling mainly international investors with false corporate information.

Of the 28 suspect investment firms that called out the U.S. Securities and Exchange Commission (SEC) on Thursday, CoinDesk found eight that appear to be targeting potential cryptocurrency investors. Some claim to be trusted new entrants trading centers; others pedal their services to retired people. One even fashions itself as a law firm that can help against crypto fraud.

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

The entities’ websites appear to be mixing rhetorical and outrageous assertions in their efforts to woo investors. Passive Trading Schemes described itself as a “trusted authority on digital currency investing” while Smartcoins promised 24 “trading the hottest coins of 2018.”

“Our bitcoin trading services are suitable for those 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 companies “mainly use misleading information to seek investors outside the US,” the SEC said. He said they had added the companies to their alert list, called PAUSE, to help investors “avoid becoming a victim of fraud.”

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

Those clear warnings in smarter form with a new sheriff of warrants may be coming to Washington. President Joe Biden has tapped Gary Gensler, the former head of crypto-savvy co-regulator of Commodities Trading and Futures Commission investments, to lead the SEC.