In Brief:
- New Jersey watchdog issued cease and desist orders to 5 websites running cryptocurrency-related frauds.
- The announcement is an attempt to reimburse three New Jersey residents who lost about $90,000.
- The scammers allegedly use false claims regarding licensing, registration, and testimonials to lure investors.
The New Jersey Attorney General and the New Jersey Bureau of Securities issued cease and desist orders to five websites running crypto-related frauds on October 28.Â
Alleged scammers include Bulk Investments, Forte Trade, Dilna Investments DBA Fidelity Revenue, RealBitcore Mining, and FilefxOption. They allegedly use false claims regarding licensing, registration, and testimonials to lure investors.
Specifically, the announcement cites three New Jersey residents who lost about $90,000 when the first three firms failed to return bitcoin investment money that investors sought to withdraw, or demanded exorbitant fees that had been hidden from them.
The other two entities, RealBitCore Mining and FilefxOption allegedly showed false customer testimonial data on their websites.
Further, the orders cite the firms for offering securities that have not registered with the Bureau, nor are they federally covered nor are they exempt from registration, which violates the regulation.
This means that the “investment strategies” that these firms promote are not only scams but also securities offerings. Even though the state attorney general involved himself in these cases, criminal charges were not filed.
The Bureau’s investigation was handled by Deputy Chief Amy Kopleton and Investigator Dina Venero of the Bureau of Securities, within the Division of Consumer Affairs.
Cryptocurrency investments are increasingly being regulated by the New Jersey Bureau of Securities. Specifically, it has pioneered the creation of cryptocurrency interest accounts.
Earlier this year, New Jersey filed charges against BlockFi and Celsius, two companies that offer high-interest savings accounts without FDIC insurance, which the Bureau of Securities calls securities.
In this more recent case, the firms involved failed to return user investment, a charge that neither New Jersey nor any other state agency has leveled against BlockFi or Celsius.
