California Takes Action Against 11 Crypto Firms Allegedly Operating Like Ponzi Schemes

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The Cali watchdog went after other crypto companies following the desist and refrain order against Nexo.

California’s regulator has targeted 11 crypto-related entities which allegedly violated the state’s securities laws.The Department of Financial Protection and Innovation , in anon Tuesday, stated that while all the accused companies offered unregistered securities to customers, most sought funds from investors to conduct crypto trading on their behalf.

Also, one of the platforms allegedly asked for cryptocurrencies to build metaverse software. Consequently, the DFPI issued a desist and refrain order to the 11 entities.“The entities are all alleged to have used investor funds to pay purported profits to other investors, in the manner of a Ponzi scheme. Furthermore, each of the entities had a referral program that operated in the manner of a pyramid scheme.

Some of the companies involved in the case, which, according to the California regulator, purportedly operate crypto trading services, include Pegasus, Elevate Pass, Remabit, and World Over the Counter Limited. The latest action comes on the heels of an earlier desist and refrain order against cryptocurrency lender Nexo. The DFPI

that the company offered its Earn Interest Product account to California residents without registering it as securities.

 

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Nexo has nothing to do with ponzi, dyor

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