Facebook Crypto Scams: Regulators and Facebook are Warning About Online Crypto Scams

MYfintec Review

Facebook and regulators move to halt cryptocurrency scams

Social network says it will ban all bitcoin and initial coin offering advertising. Facebook has banned all advertisements for cryptocurrencies, including bitcoin, after it decided too many of them were being used to mislead or deceive potential customers. Its action came the same day as news of US regulatory activity against cryptocurrency issuers, including a move by the Securities and Exchange Commission to shut down an initial coin offering promoted by the former boxer Evander Holyfield. That activity weighed on the price of bitcoin on Tuesday, sending it below $10,000, only weeks after it hit a high of $19,000. Facebook said it had introduced a blanket ban on ads for “financial products and services that are frequently associated with misleading or deceptive promotional practices”, with cryptocurrencies and a type of financial betting called binary options cited among the worst offenders.

A Facebook spokesperson said user complaints about scams had triggered the move, which comes less than a month after Mark Zuckerberg, Facebook’s co-founder and chief executive, said he would “study the positive and negative aspects” of cryptocurrency. Facebook’s prohibition includes promotions for ICOs — an increasingly popular, unregulated crowdfunding mechanism in which companies raise money by selling virtual tokens instead of handing over equity. ICOs raised the equivalent of $3.7 billion in cryptocurrencies last year, according to tracker Coinschedule. The fundraising mechanism has garnered some legitimacy: respected Silicon Valley venture capitalists have clamoured to buy into a $1.2bn ICO by messaging app Telegram, while football club Arsenal last week announced a promotional deal with CashBet, a gambling company launching an ICO.

But many ICOs are criticised for skirting securities laws and offering scant investor protection. On Tuesday, the SEC said it had halted an ICO, promoted by Mr Holyfield, by Texas-based AriseBank, which had purportedly raised $600m in just two months. Steve Peikin, co-director of SEC enforcement, slammed AriseBank as “an outright scam”. An AriseBank representative did not immediately respond to a request for comment. According to the SEC, AriseBank exploited the digital asset mania by claiming to be a “decentralised bank” and offering consumers an automated way to trade various cryptocurrencies. But the SEC alleges that AriseBank’s co-founders were pushing unregistered investments by selling its “AriseCoin” to retail investors, and failed to disclose that key executives had criminal histories.

A Dallas court approved a freeze on AriseBank’s assets and appointed a receiver. Separately, the Commodity Futures Trading Commission has sent official requests for information to Bitfinex, a virtual currency exchange, and Tether, the company behind a digital coin which claims it is backed by US dollars. The subpoenas were sent on December 6 and first reported by Bloomberg on Tuesday. A person familiar with the matter confirmed the report. The CFTC declined to comment.

Origin https://www.ft.com/content/9c1050ca-05f8-11e8-9650-9c0ad2d7c5b5

Set up an account on a recommended exchange or broker website to start trading:
Link: Visit recommended website HERE

Leave a Reply

Your email address will not be published. Required fields are marked *