In common law systems, it is precedent that informs judicial approaches to new and previously unaddressed matters. The precedent that will likely shape the body of U.S. case law on fraudulent initial coin offerings (ICOs) is currently being forged in a federal court in the New York borough of Brooklyn, where a 39-year old entrepreneur, Maksim Zaslavskiy, has pleaded guilty to committing securities fraud. The development that will most likely result in a landmark decision – the jury will gather in April 2019 to decide on a sentence – is yet another twist of a now 14 month-long effort, involving …
The United States Commodity Futures Trade Commission (CFTC) has filed a complaint against Florida resident Alan Friedland for fraudulently raising $1.6 million through a cryptocurrency tied to a forex trading scheme. The April 16 filing accuses Friedland and his companies Fintech Investment Group, Inc and Compcoin LLC of illegally soliciting investments and publishing “untrue and materially misleading” press materials for its digital asset Compcoin from 2016 until 2018. ‘Proprietary trading algorithm’ The defendant claimed that Compcoin would allow customers to access Fintech’s proprietary trading algorithm ART and would deliver high returns on investment. Friedland falsely claimed that ART’s profit potential …
A U.S. federal district judge has ruled that an allegedly fraudulent crypto token meets the definition of a commodity, bringing the case under regulators’ purview, Finance Feeds reports September 27. Judge Rya W. Zobel of the Massachusetts District Court ruled Sept. 25 against a motion to dismiss a case that had been launched by the Commodity Futures Trading Commission (CFTC) against an allegedly fraudulent crypto scheme known as “My Big Coin Pay Inc.,” reported to have been based in the state of Nevada. The CFTC had sued tech entrepreneur Randall Crater, and other relief defendants tied to his firm, for …
French stock market regulator, the Autorite des Marches Financiers (AMF), announced it is blacklisting 21 new investment websites, including multiple crypto-related sites, September 26. The AMF characterizes the new additions as “unauthorized websites” that offer “atypical investments,” and directs users to its existing blacklist, which it notes is “not comprehensive.” In March, the AMF had added 15 websites — including those related to crypto and crypto-assets — to its blacklist, reminding consumers that “no advertising materials should make you overlook the fact that high returns always involve high risk.” Cointelegraph has this month reported on a similar move from Belgian …
This week, on the same day, two United States regulating bodies — the Financial Industry Regulatory Authority (FINRA) and its ruling organization the Securities and Exchange Commission (SEC) — reported filing objections against non-compliant crypto players who made some false statements regarding their businesses. While the SEC barely needs any introduction for those who follow the crypto industry, FINRA might seem unfamiliar. FINRA is a private, non-federal agency, although it is overseen by the SEC. It regulates one specific part of the securities industry in the U.S.: brokerage firms doing business with the public. What makes the news particularly interesting …