The US Commodity Futures Trading Commission (CFTC) announced on Tuesday that it had filed a civil enforcement action to charge four operators for running a $44 million Bitcoin Ponzi scheme
Ponzi Scheme
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. Read this Term.
According to the press release, Dwayne Golden of Florida, Jatin Patel of India, Marquis Egerton of North Carolina, and Gregory Aggesen of New York were charged with fraud for operating Ponzi schemes involving Bitcoin
Bitcoin
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities. Read this Term, for fraudulently soliciting more than $44 million of investments, and misappropriating millions of dollars.
Golden, Patel, and Egerton are accused of fraudulently soliciting more than $23 million worth of bitcoins through the websites Empowercoin and Ecoinplus. Also alleged in the complaint is that Golden, Patel, Aggesen, and an associate operated JetCoin, through which they defrauded individuals of more than $21 million in bitcoins.
The complaint says that the websites all promised customers that professionals would trade their bitcoins for daily profits.
Customers’ Bitcoins were either misappropriated by defendants and their accomplice or they were used to make fictitious profit payments to other customers that were Ponzi schemes, according to the complaint.
Civil Monetary Penalties Sought
Golden, Patel, and Egerton are alleged to have misappropriated $9.8 million in bitcoin. In addition, the operators and an accomplice are also accused of misappropriating approximately $7.8 million worth of Bitcoin received from the JetCoin website.
“This case illustrates how fraudsters never tire of devising schemes to separate people from their hard-earned money, and digital asset frauds are no exception,” Vincent McGonaglem, Acting Director of Enforcement, commented. Accordingly, restitution, disgorgement, civil monetary penalties, and permanent trading and registration bans are requested, as well as a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
Last month, the CFTC charged The W Trade Group LLC, Larry Ramos Mendoza and Joseph Carvajales, both from Miami, Florida, with fraud and misappropriation of more than $19 million involving futures, forex, and options.
The US Commodity Futures Trading Commission (CFTC) announced on Tuesday that it had filed a civil enforcement action to charge four operators for running a $44 million Bitcoin Ponzi scheme
Ponzi Scheme
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. Read this Term.
According to the press release, Dwayne Golden of Florida, Jatin Patel of India, Marquis Egerton of North Carolina, and Gregory Aggesen of New York were charged with fraud for operating Ponzi schemes involving Bitcoin
Bitcoin
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities. Read this Term, for fraudulently soliciting more than $44 million of investments, and misappropriating millions of dollars.
Golden, Patel, and Egerton are accused of fraudulently soliciting more than $23 million worth of bitcoins through the websites Empowercoin and Ecoinplus. Also alleged in the complaint is that Golden, Patel, Aggesen, and an associate operated JetCoin, through which they defrauded individuals of more than $21 million in bitcoins.
The complaint says that the websites all promised customers that professionals would trade their bitcoins for daily profits.
Customers’ Bitcoins were either misappropriated by defendants and their accomplice or they were used to make fictitious profit payments to other customers that were Ponzi schemes, according to the complaint.
Civil Monetary Penalties Sought
Golden, Patel, and Egerton are alleged to have misappropriated $9.8 million in bitcoin. In addition, the operators and an accomplice are also accused of misappropriating approximately $7.8 million worth of Bitcoin received from the JetCoin website.
“This case illustrates how fraudsters never tire of devising schemes to separate people from their hard-earned money, and digital asset frauds are no exception,” Vincent McGonaglem, Acting Director of Enforcement, commented. Accordingly, restitution, disgorgement, civil monetary penalties, and permanent trading and registration bans are requested, as well as a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
Last month, the CFTC charged The W Trade Group LLC, Larry Ramos Mendoza and Joseph Carvajales, both from Miami, Florida, with fraud and misappropriation of more than $19 million involving futures, forex, and options.
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