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Cryptos Rise as SEC Cracks Down on ICO Scam

Cryptocurrency Apr 03, 2018 08:08AM ET
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Investing.com - Bitcoin and other virtual coins were higher on Tuesday, as the U.S. Securities and Exchange Commission charged the founders of Centra Tech for an Initial Coin Offering (ICO) scam.

Bitcoin was trading at $7,331.20, increasing 3.77% as of 8:07 AM ET (12:07 GMT) the Bitfinex exchange. The virtual currency is far from its peak of $20,000 in December 2017 and has struggled to recover since falling below $6,000 in February.

The regulator alleges that Centra Tech, which was backed by former world boxing champion Floyd Mayweather, misled investors and failed to register the ICO.

Founders Robert Farkas and Shorab “Sam” Sharma are accused of raising over $32 million and falsely telling investors that they had a partnership with MasterCard, Visa and Bancorp.

Steve Peikin, co-director of the SEC's Division of Enforcement, said the company used elaborate marketing schemes and celebrity endorsements to lure investors.

“Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors,” he said in a statement.

Meanwhile in Japan, the central bank set up a Q&A page aimed at the general public on cryptocurrencies. The negative site includes questions such as whether digital coins could be considered real money and if investors could profit from them. The page also notes that no central bank backs cryptos, and asks “Shouldn’t we ban something we don’t really understand?”

Other virtual currencies were up in morning trading, with rival Ethereum, the world’s second largest cryptocurrency by market cap, rising 2.00% to $399.16 on the Bitfinex exchange. Ripple, the third largest virtual currency, increased 5.68% to $0.52660 while LiteCoin was at $123.25, jumping 2.52%.

Cryptos Rise as SEC Cracks Down on ICO Scam
 

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