SEC Blocks Dozens of Websites Offering Fraudulent Investment Schemes

Friday, 12/05/2023 | 04:13 GMT by Arnab Shome
  • These websites were offering investment through crypto and other illegal securities.
  • Some of them were offering returns as high as 61.9 percent a day.
SEC

The US Securities and Exchange Commission (SEC), in its action against fraudulent investment platforms, charged GA Investors and a few other unnamed platforms. These platforms fraudulently offered securities, including crypto asset mining pools, through dozens of websites.

SEC's Bust against Frauds

Announced Thursday, the SEC's order required the defendants to take down the websites immediately. These websites targeted victims not only in the US but worldwide.

The US securities watchdog has charged GA Investors and others with fraud and is seeking a court order for a temporary restraining order, asset freeze, and other emergency relief. In addition, the regulator is moving to recover victims' funds and considering imposing civil monetary penalties on the platforms.

According to the complaint filed in a federal court in Massachusetts, the fraudulent websites offered exorbitant returns as high as 61.9 percent a day through securities investments to lure victims. Some of the flagged websites even impersonated legitimate broker-dealers.

Identifying fraudulent investment platforms is tough unless victims complain against them to the authorities. Though regulators actively monitor the markets to identify these platforms, fraudsters still siphon huge amounts from investors.

"The SEC's Office of Investor Education and Advocacy (OIEA) has issued Investor Alerts warning investors about fraudulent crypto trading websites and crypto investment scams," the announcement added. "Additionally, OIEA and the FBI jointly warned investors about fraudsters who falsely claim to be registered – or who impersonate registered investment professionals – in order to lure investors into scams."

Classic Technique to Defraud Investors

The SEC's complaint highlighted that GA Investors alone solicited about $85,000 from investors through fraudulent securities offerings. Its website offered guaranteed daily returns ranging from 2 percent to 4.5 percent, which was extremely high for any investment instrument. The fraudulent platform directed the victims to purchase crypto assets from a separate crypto asset trading platform and transfer those crypto assets to a GA Investors' wallet address.

Initially, the fraudulent platform allowed small withdrawals to some of the investors. However, the platform halted withdrawals when investors sought to recoup larger portions of their investments. The allegations against the platform include freezing investors' funds and misappropriating them.

The US Securities and Exchange Commission (SEC), in its action against fraudulent investment platforms, charged GA Investors and a few other unnamed platforms. These platforms fraudulently offered securities, including crypto asset mining pools, through dozens of websites.

SEC's Bust against Frauds

Announced Thursday, the SEC's order required the defendants to take down the websites immediately. These websites targeted victims not only in the US but worldwide.

The US securities watchdog has charged GA Investors and others with fraud and is seeking a court order for a temporary restraining order, asset freeze, and other emergency relief. In addition, the regulator is moving to recover victims' funds and considering imposing civil monetary penalties on the platforms.

According to the complaint filed in a federal court in Massachusetts, the fraudulent websites offered exorbitant returns as high as 61.9 percent a day through securities investments to lure victims. Some of the flagged websites even impersonated legitimate broker-dealers.

Identifying fraudulent investment platforms is tough unless victims complain against them to the authorities. Though regulators actively monitor the markets to identify these platforms, fraudsters still siphon huge amounts from investors.

"The SEC's Office of Investor Education and Advocacy (OIEA) has issued Investor Alerts warning investors about fraudulent crypto trading websites and crypto investment scams," the announcement added. "Additionally, OIEA and the FBI jointly warned investors about fraudsters who falsely claim to be registered – or who impersonate registered investment professionals – in order to lure investors into scams."

Classic Technique to Defraud Investors

The SEC's complaint highlighted that GA Investors alone solicited about $85,000 from investors through fraudulent securities offerings. Its website offered guaranteed daily returns ranging from 2 percent to 4.5 percent, which was extremely high for any investment instrument. The fraudulent platform directed the victims to purchase crypto assets from a separate crypto asset trading platform and transfer those crypto assets to a GA Investors' wallet address.

Initially, the fraudulent platform allowed small withdrawals to some of the investors. However, the platform halted withdrawals when investors sought to recoup larger portions of their investments. The allegations against the platform include freezing investors' funds and misappropriating them.

About the Author: Arnab Shome
Arnab Shome
  • 6425 Articles
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6425 Articles
  • 85 Followers

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