Despite growth in crypto scams, SEC recovered only $36 million for the victims

December 29, 2018
Chris Wheal

In the last two years, out of the billions of dollars cryptocurrency investors have lost and the 90 crypto fraud cases that have been filed, only $36 million has been recovered, according to a recent report from the Wall Street Journal.

crypto scam

The Securities and Exchange Commission (SEC) are currently investigating these crypto fraud cases, specifically BitConnect, an investment platform. The investors who put their money into BitConnect during 2017’s surge in cryptocurrency value, lost their money. The total amount of funds which investors lost is hard to calculate.

The Texas State Securities Board issued a cease-and-desist order to BitConnect earlier this year, accusing them of violating the Texas Security Act. This was at the same time the company reached a market value of $2.8 billion USD.

The cease-and-desist order stated that BitConnect must cease and desist their operations of offering to sell or selling any cryptocurrencies and securities in the state of Texas because the cryptocurrency (securities) aren’t registered and therefore aren’t in compliance with the Securities Commissioner.  

Within the last year, state regulators have initiated 70 different actions involving enforcement surrounding cryptocurrency. However, none of the investors received their money back as of yet, even though the percentage of cryptocurrency lawsuits increased dramatically in 2018.

Furthermore, a U.S. District Judge Raymond Dearie in New York ruled that U.S. Securities law covers cryptocurrencies.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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