Difference between revisions of "Cryptocurrency fraud"

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=='''Initial Coin Offering “Pump and Dump” and Market Manipulation Schemes'''==
=='''Initial Coin Offering “Pump and Dump” and Market Manipulation Schemes'''==


The SEC also warns that companies claiming to be related to, or asserting that they are engaging in, ICOs may be attempting scam investors by fraudulently manipulating the market. In one market manipulation scheme, known as the “pump and dump” scheme, fraudsters seek to boost a company’s stock by issuing false or misleading statements to the marketplace. After “pumping” up the stock through these false or misleading statements, the fraudster will then “dump” their shares to quickly profit from the misinformation.
The SEC also warns that companies claiming to be related to, or asserting that they are engaging in, ICOs may be attempting scam investors by [https://www.investor.gov/introduction-investing/investing-basics/glossary/market-manipulation fraudulently manipulating the market]. In one market manipulation scheme, known as the [https://www.zuckermanlaw.com/rewards-and-bounties-for-whistleblowers/market-manipulation-whistleblower-lawyers/ “pump and dump” scheme], fraudsters seek to boost a company’s stock by issuing false or misleading statements to the marketplace. After “pumping” up the stock through these false or misleading statements, the fraudster will then “dump” their shares to quickly profit from the misinformation.


In August 2017, the SEC issued an investor alert related to public companies making ICO-related claims. The investor alert was issued after the SEC suspended the trading of four companies’ shares for making “claims regarding their investments in ICOs or touted coin/token related news.” The companies affected by trading suspensions include First Bitcoin Capital Corp., CIAO Group, Strategic Global, and Sunshine Capital.
In August 2017, the SEC issued an [https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/investor-25 investor alert] related to public companies making ICO-related claims. The investor alert was issued after the SEC suspended the trading of four companies’ shares for making “claims regarding their investments in ICOs or touted coin/token related news.” The companies affected by trading suspensions include [https://www.sec.gov/litigation/suspensions/2017/34-81474.pdf First Bitcoin Capital Corp.], [https://www.sec.gov/litigation/suspensions/2017/34-81367-o.pdf CIAO Group], [https://www.sec.gov/litigation/suspensions/2017/34-81314-o.pdf Strategic Global], and [https://www.sec.gov/litigation/suspensions/2017/34-80435-o.pdf Sunshine Capital].


=='''CFTC Warns of “Pump and Dump” Schemes in Digital Currency Offerings'''==
=='''CFTC Warns of “Pump and Dump” Schemes in Digital Currency Offerings'''==