Crypto market scam LeadInvest goes blind in Texas

Crypto market scam LeadInvest goes blind in Texas

It appears that the fraudsters and scammers who are taking advantage of the cryptocurrency market are on the increase of late.

The latest company to be slapped with a cease and desist order in the state of Texas is Leadinvest, which at first glance appears to be a pyramid scheme. This follows hot on the heels of other failed ventures such as BitConnect and USI Tech, which have also vanished from the Northern American market but not before taking thousands of investors for a ride.

According to the order, LeadInvest targeted investors in Texas and failed not only to disclose the background and qualifications of its team members, but also the liabilities associated with its mining and lending operations. The team associated with the project is also non-existent, with stock photos being used in conjunction with fabricated names, authorities said.

The largest red flag for the Texas State Securities Board was the fact that the platform was offering unlicensed securities for sale, and therefore violating most of the Texas Securities Act.

On closer examination, the LeadInvest website is loaded with “get-rich-quick” language promising interested parties incredible returns, and that “zero” cryptocurrency experience is required to get involved. After a light attempt at explaining the cryptocurrency market, the team is presented along with a call to action informing investors of getting started even with just a few cents.

The site also features a “careers” tab in which a vague job description is offered, and is geared towards promoters for the program. As more of these types of scams appear, their longevity will most likely be throttled by government officials that are now on high alert due to a sharp increase in fraud in the space. Unfortunately, this is also giving a bad name to the crypto currency market.

This wouldn’t be the first time that the securities commissioner of the state of Texas has directly targeted fraud related to the cryptocurrency space. Just last month, the Texas board accused known cryptocurrency scam BitConnect of both fraud and selling unlicensed securities. The order led to the eventual downfall of the platform, with its underlying asset losing over 90% of its value in a short period of time.

DavorCoin, another lending platform dealing with the sale of unlicensed securities, was also recently issued an emergency order by the Texas commissioner. Similar to BitConnect, users purchased DavorCoin’s underlying asset in order to lend it on the platform and receive a commission for doing so. Although DavorCoin issued a statement claiming that BitConnect’s downfall didn’t “change anything for (them),” it quickly became the fourth sting by the Texas government due to issuing unlicensed securities. Yet another was the USI Tech scam which is still under investigation but that company has abandoned operations in North America.

The commissioner in Texas has truly taken the bull by the horns when it comes to targeting fraud in the space and will most likely continue to do so as more “lending” platforms materialize.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
DavorCoin takes down lending platform as it joins Bitconnect in authorities’ hit list

DavorCoin takes down lending platform as it joins Bitconnect in authorities’ hit list

They said they are paying users back in DAV tokens, which are now barely 10 cents each.

Texas slaps yet another cease-and-desist order on another cryptocurrency “lending platform.” Barely a month since starting its crackdown on Bitconnect—which has now shut down its platform and is currently facing a plethora of lawsuits—the Texas State Securities Board (TSSB) has issued an emergency cease-and-desist order against DavorCoin.

DavorCoin, which issues the token DAV, has allegedly violated sections of the Texas Securities Act by issuing unregistered securities, and targeting retirees under misleading and fraudulent information.

“We confirmed our suspicion that they were being marketed toward retirees,” says Joseph Rotunda, director of the enforcement division at the TSSB. “They were not disclosing the information that needs to be disclosed to an investor.”

According to the TSSB, DavorCoin operated like Bitconnect, and in fact took advantage of the latter’s collapse, marketing themselves even harder in a bid to take over the market. “DavorCoin appeared to step up marketing of its lending program after the closure of another cryptocurrency lending platform, BitConnect,” the TSSB wrote in a release.

In a Medium post, DavorCoin announced that they are closing down their “lending platform,” blaming the decision on the “crypto-environment dramatically changing recently.” But instead of paying users back with the amount of BTC that they put into the platform, DavorCoin, like Bitconnect, will pay them back using their own tokens—which, compared to the value investors bought at, are pretty much worthless at this point. From a high of over $170 in mid-January, DAV now sits at $.09, and can possibly drop even lower.

“We will release today all lending packages we have and every user will be credited in his account the number of DAV he placed in his/her lending package plus a 10% bonus.”

Consequently, users are not pleased, saying the move is clearly a scam, and lamenting that people were blocked from making withdrawals while the token crashed down.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Investors call ‘Crypto-Wonderland’ BitConnect a Ponzi scheme

Investors call ‘Crypto-Wonderland’ BitConnect a Ponzi scheme

Cryptocurrency exchange BitConnect is embroiled in a legal battle with a group of investors who accused the company of operating a “wide-reaching Ponzi scheme.”

According the class action lawsuit filed at the federal court in West Palm Beach, Florida, BitConnect and its associated marketers promoted an idea which has “illogically promised” monthly returns of 40%, with a 1% compounding daily interest, disregarding market performance. The plaintiffs also claimed that “things at BitConnect weren’t what they seemed to be.”

However, the cease-and-desist letters that BitConnect received from the states of Texas and North Carolina only discontinued its lending platform, shutting down the alleged Ponzi scheme, leaving investors with unusable tokens as the coin crashed 90% of its average value, depreciating further as its own executives hastened its demise.

Claiming to have lost a total of $771,000 to BitConnect, the plaintiffs accused the company, its directors, as well as all its associates of violations of state and federal securities laws and deceptive trade practices, among other claims.

The investors compared BitConnect’s narrative to “Wonderland” a story based on Lewis Carroll’s Alice stories. Convinced that its fictive elements present a danger to the investing public, the plaintiffs said their goal was “to prevent the wrongdoers from simply turning off the lights and dancing away singing: ‘Ciao, baby, gotta run!’”

Signing for the litigation was David Silver, a Florida-based lawyer who specializes in cryptocurrency-related cases. The case dossier does not list any lawyer for BitConnect or any other defendants.

With the two states prohibiting BitConnect’s sale of securities, falsely led investors in the crypto scene quickly reacted with major sell orders, effectively abandoning the coin. As of writing, BitConnect’s market cap has dwindled from $2.6 billion to a mere $57 million, according to CoinMarketCap.com

Without a whitepaper describing its business structure in detail, the people involved with BitConnect’s shady business are reportedly on the run. Despite all these, the infringements done by BitConnect and its associates are not enough to make it stop, according to reports. After its announced shutdown, BitConnect is still operation, with an offshoot called BitConnectX holding an ICO reserved for U.S.-based buyers.

Other coins that appeared to improve as a result of the shutdown surfaced almost instantly in the crypto market. Scheming new ways to obscurely advertise a Ponzi scheme, Davorcoin (DAV) and other altcoins continued the same strategy employed by BitConnect: pose as lending platforms in which users may lock their funds for a certain time, and thereafter receive daily returns for doing so. Such opportunist overtones are often seen in recent forking frenzies over crypto, and the continuation of what is exactly the same Ponzi schemes is alarming.

With all the heat brewing in the crypto world, it’s best for new users, particularly, to place their trust on major networks like Bitcoin Cash whose stability and scalability has been proven by its passionate community backed by decentralized development. As the true remaining version of Satoshi Nakamoto’s vision for peer-to-peer digital cash, Bitcoin Cash is poised to take on the future.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Cryptocurrencies bounce back up after gut-wrenching nosedive

Cryptocurrencies bounce back up after gut-wrenching nosedive

China and South Korea started a quake; BitConnect went all in with a landslide.

Everything was red.

The past few days have been shaky for HODLers as cryptocurrencies started dropping early this week after news of China purging not only cryptocurrencies but mining operations as well made the rounds. Incoming regulations from the South Korean government—as well as a false alarm on an all-out ban which was later on redacted by their executive office—also contributed to the drop.

South Korea houses some of the biggest crypto exchanges and holds the third biggest market for BTC, with citizens also favouring Bitcoin Cash (BCH) and exchanges selling them at a premium. China, on the other hand, is home to several miners—Chinese miners make up around 79% of the legacy chain’s (BTC) global hash rate.

But Wednesday was particularly rough—as a drastic, panic-inducing crash by about 40% all across the board went on. The plummet came after fanatic-ridden Bitconnect announced that it is shutting down its lending and exchange platform, as cease and desist orders were handed both by the Texas State Securities Board and the North Carolina Secretary of State Securities Division. Apart from this, the company blames “bad press” as well as alleged DDoS attacks against the platform.

Cryptocurrencies bounce back up after gut-wrenching nosedive

From a high of over $472 three weeks ago, it now trades at a puny $27 value; its market cap—from a high of $2.85 billion towards the end of December 2017 now sits at $246 million. And it seems that the scam scare has taken down the rest of the cryptocurrency trading board with it, although only temporarily.

Cryptocurrencies bounce back up after gut-wrenching nosedive

Cryptocurrencies are now bouncing back from the crash, and it may only be a matter of time before rates get back to their pre-crash values from last week.

Additionally, January is historically a crash season for cryptocurrencies, with the pattern being consistent for BTC for years.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
BitConnect shuts down exchange

BitConnect shuts down exchange, lending platform

The team behind cryptocurrency company BitConnect announced they have closed down the exchange and lending platform, in the wake of early action from regulators.

Following the issuance of two cease and desist letters to the controversial exchange, BitConnect representatives gave 5 days’ notice of a pending shutdown of their exchange service, while ceasing business through their lending arm immediately.

According to posts published on the company’s website early this week, BitConnect will still support user accounts as a wallet service, following the decision to close parts of its business.

“In short, we are closing lending service and exchange service while BitConnect.co website will operate for wallet service, news and educational purposes,” according to the company.

The cease and desist letters issued by regulators in North Carolina and Texas respectively warned BitConnect the company was operating in unregistered securities, which could have paved the way for further enforcement action.

The BitConnect statement also blamed the impact of ‘bad press’ on user confidence, as well as a series of DDoS attacks against its platform, as factors in the company’s decision to wrap up its operations.

The news will be welcomed by some in the cryptocurrency community, including Vitalik Buterin, founder of ethereum, who is amongst those to have labelled BitConnect a ‘Ponzi scheme’.

Despite the setback, BitConnect maintained that a planned ICO for the company will still go ahead, albeit on a more limited prospectus.

“This is not the end of this community, but we are closing some of the services on the website platform and we will continue offering other cryptocurrency services in the future,” accoridng to the BitConnect.

The news will come as a blow to customers who had engaged with the BitConnect platform, and to those invested in its offshoot BitConnect (BCC) cryptocurrency, which peaked at over $430 earlier this month. On today’s news, BCC stands at around $5.93, down over 96%.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.