Earlier this week, New York Attorney General Letitia James joined the California Department of Financial Protection and Innovation (DFPI) and six other state regulatory bodies in filing a suit against Nexo Capital Inc. (Nexo) for failing to register as a securities or commodities broker-dealer and for lying to investors about its registration status. The lawsuit, filed in New York County State Supreme Court, alleges that Nexo promoted and sold unregistered securities in the form of an interest-bearing cryptocurrency account called the "Earn Interest Product." The company allegedly promised investors high returns while failing to register as a securities broker-dealer as required by state law. The state securities regulators of California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont all filed their own administrative actions against Nexo.
In a separate action, the Delaware Department of Justice's Investor Protection Unit (IPU) recently issued a cease-and-desist order against 23 entities and individuals involved in a cryptocurrency scam known as the "pig butchering scam." The moniker comes from scammers' practice of grooming investors to make investments using cryptocurrencies ("fattening" the victims) before absconding with stolen funds ("butchering"). According to a press release, the IPU received complaints from Delawareans who had been contacted online by unknown persons urging them to invest in cryptocurrencies. After investors saw large returns on initial investments, they were encouraged to invest more and were ultimately prohibited by the scammers from withdrawing their funds. The scam reportedly involved thousands of victims across the country with losses upward of billions of dollars.
For more information, please refer to the following links:
- Attorney General James Sues Cryptocurrency Platform for Operating Illegally and Defrauding Investors
- DFPI Joins Other State Securities Regulators To Bring Actions Against Another Crypto Interest Account Provider
- Delaware Investor Protection Unit Grills "Pig Butchering" Scammers
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.