SEC Calls Out Suspicious Crypto Companies Targeting Global Traders

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The US government’s top investment watchdog has reported a number of unregistered cryptocurrency companies for apparently defrauding mostly international investors with false company information.

Of the 28 suspicious investment firms the Securities and Exchange Commission (SEC) phoned on Thursday, CoinDesk found eight that appear to be targeting potential cryptocurrency investors. Some claim to be trustworthy newcomer trading centers; others sell their services to retirees. One is even a law firm that can help against crypto scams.

According to CoinDesk, featured companies AxTrading-Investment, Passive Trade Plan, RetireWell Investors, Reclaws International Inc. and SmartCoins24 offered cryptocurrency and blockchain services on their websites on Thursday. Three other companies whose websites were not available, BitminingFX, Cryptobravos, and FXBitcash, were also blacklisted by the SEC.

The company’s websites seem to mix inviting rhetoric and sweeping claims in their efforts to attract investors. Passive Trade Plan’s described itself as a “trusted authority for investing in digital currencies” while Smartcoins 24 promised to trade “the hottest coins of 2018”.

“Our Bitcoin trading services are suitable for those who are new to the world of cryptocurrencies, as well as for Bitcoin experts and large Bitcoin investors,” states the AxTrading-International website.

The SEC said Thursday that investors have filed complaints against all 28 flagged companies. These companies “use misleading information to primarily attract non-US investors,” the SEC said. She said she put the companies on her PAUSE warning list to help investors “avoid falling victim to fraud”.

The SEC regularly warns the investing public about too good, to be true, opportunities in the cryptocurrency space. Earlier press releases detailed information on fraud in stock exchange offers and in cases involving public companies adding value with ICOs. As early as 2014, the agency warned investors not to put themselves in the shoes of the Bitcoin hype machine.

These clear-eyed warnings could take on sharper form when a new securities sheriff is likely to come to Washington. President Joe Biden has recruited Gary Gensler, the crypto-savvy former head of the other investment regulator, the Commodities and Futures Trading Commission, to head the SEC.