Bitqyck Crypto Exchange Settles with SEC on Charges About Committing Token Sale Fraud

The U.S. Securities and Exchange Commission (SEC) has recently announced that it would settle the charges related to Bitqyck, a cryptocurrency token issuer which was accused of being a fraud. The two founders of the company, Sam Mendez and Bruce Bise, raised $13 million USD selling the tokens of their company to over 13,000 investors.

However, the sale of the tokens, which were deemed as securities by the regulators, was illegal because they were unregistered. According to the SEC, the goal of the tokens was to work like securities, as they provided a share of the company’s stocks via a smart contract.

Another accusation was that the company did not own any of the mining facilities that it affirmed to have. This company received $4.5 million USD from the investors but was not completely truthful when it disclosed its business.

According to David Peavler, a regional director of the SEC, digital assets such as this one can look appealing at first, but they might be dangerous investments.

During its investigations, the SEC was aided by the Texas State Securities Board and Hawaii’s Securities Commissioner Office.

Now, the company has decided to settle the matters and will pay around $8.5 million USD in penalties. Each of the founders will also have to pay over $850,000 USD.

This is part of a current trend that the SEC is following of prosecuting companies that offer illegal securities. Over 40 companies focused on the blockchain technology and cryptos were prosecuted so far.

One of the most high-profile cases involving the SEC the one related to the messaging platform Kik, which was charged in around $100 million USD.

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Author: Bitcoin Exchange Guide News Team

Multi-level Marketing Promoter of Bitcoin Funding Team and My7Network Will Settle With FTC

The United States Federal Trade Commission (FTC) has agreed to settle the charges it filed in 2018 against a pyramid scheme that involved 4 individuals. As part of the settlement, the promoters of recruitment-based cryptocurrency schemes are permanently banned from operating or participating in any multi-level marketing program. Additionally, they are supposed to pay a fine of $500,000.

The press release states that the defendants had the structure of the schemes made sure that few would profit. Most associates failed to get back their initial investments. YouTube, conference calls, and various social media platforms were used to source new victims.

It states:

“As part of their proposed settlements with the FTC, Dluca will pay $453,932, and Chandler will pay $31,000. Pinkston also agreed to a $461,035 judgment, which will be suspended upon payment of $29,491, due to his inability to pay the full amount. If he is later found to have misrepresented his finances, he will be required to pay the full amount.”

Thomas Dulca, Eric Pinkston, Louis Gatto, and Scott Chandler were behind a prominent pyramid scheme which was shut down in 2018. Under the names Bitcoin Funding Team and My7Network, the four fraudsters recruited participants to maintain the pyramid. The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the Southern District of Florida.

Operation crypto sweep is trying to make ICOs safer in the US and Canada. It comes as part of a joint effort between state and provincial securities regulators in the US and Canada. NASAA stated in August of 2018 that the operation had investigated over 200 ICOs in its first four months of activity.

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Author: Sritanshu Sinha

ICO Ratings Initial Coin Offering Ranking Service Receives Cease and Desist Letter From The SEC

The U. S. Securities and Exchange Commission (SEC) has recently decided to emit a cease and desist order against ICO Rating, which is a company focused on researching about the crypto market and rating the best investments.

According to the SEC, ICO Ratings has violated the Securities Act. The company is being accused of describing securities to get a certain direct or indirect compensation from the group that issues the investment.

This happened because the company charged fees in order to create the reports of the investments. As some of the tokens listed on the platform were considered securities, the company broke the law. The illegal reports were also widely published on social media, which is also against the norms.

The SEC affirms that ICO Rating was paid over $100,000 USD by companies and groups that issued ICOs to have them rated. These payments, however, were never disclosed to the readers of the site, meaning that they could end up investing in these security tokens without knowing that they were seeing something that the SEC considered to be a paid promotion.

ICO Ratings was ordered to cease all activities, give the money back (plus interest) and then pay a civil money penalty that would be over $160,000 USD.

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Author: Gabriel Machado

Former Head Of SEC’s Cyber Unit Is Moving To Coinbase’s Law Branch

Robert A. Cohen, the former head of the U. S. Securities and Exchange Commission (SEC) Cyber Unit, will be joining Coinbase’s law firm Davis Polk & Wardwell LLP soon. According to the reports, he is the newest partner in the company.

The executive worked with the SEC for 15 years and quit last month. Every eye was on him ever since, as people were wondering where he would go. After his departure, the division of the SEC is without a leader temporarily, as no one was announced to take his place.

His former unit was, in fact, very focused on the crypto world. It was created back in 2017 by the SEC to check issues involving the blockchain technology.

During his work with the cyber unit, Cohen oversaw several lawsuits and legal activity. He also got famous as he pursued legal action against several Initial Coin Offerings (ICOs). One of the most high-profile cases was the one against Kik Interactive, which happened recently.

Recently, Cohen affirmed that the SEC carefully choose who to go after. Their goal was to get some high-profile cases in order to get the word out. This way, more companies would understand the risks of illegal ICOs and would stop it without the SEC needing to go after every company out there.

Now, Robert A. Cohen has changed sides and will help Coinbase. He is, however, legally barred from speaking with any SEC official for around a year. There are regulations which prevent him from using too much of his influence now that he is out of the public service.

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Author: Gabriel Machado

SEC Delays The Decision Again For 3 Bitcoin ETFs (Bitwise, VanEck/SolidX and Wilshire Phoenix)

The U. S. Securities and Exchange Commission (SEC) has decided for the delay on the decision about three different Bitcoin exchange-traded funds (ETFs). These were the most recent ETFs, the ones filed by VanEck and SolidX, Bitwise Asset Management and Willshire Phoenix. If approved, they would be launched at CBOE BZX and NYSE Arca.

As the official time for a decision, 240 days, was about to be reached, the decision of the SEC was very unsurprising: they simply decided not to make the decision right now.

According to the SEC rules, the entity will have until October 13 and 18 to decide for the Solid X and Bitwise ETFs and until September 29 for Wilshire’s ETF.

Bitcoin ETFs Are Very Hard To Approve

Unfortunately, it is simply extremely hard to approve an ETF right now. The SEC is very concerned about market manipulation in the crypto market, so it is very unlikely to approve any of it while the issues are not properly addressed.

As the SEC sees the crypto market as still very unregulated and prominent to manipulation, the entity has several concerns about what an ETF might mean. A lot of BTC trading is said to be wash trading and several whales (wealthy investors) have the means to move the market the way they want to.

Because of all these issues, it is considerably hard to believe that the ETF will be out anytime this year, as none of the three companies have provided any guarantee that the market will not suffer from manipulation.

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Author: Bitcoin Exchange Guide News Team

Chief Innovation Officer of LabCFTC, Daniel Gorfine to Step Down to Pursue Goals Within the Private Sector

Chief Innovation Officer of LabCFTC, Daniel Gorfine to Step Down to Pursue Goals Within the Private Sector

On Friday, August 2, 2019, the U.S. Commodity Futures Trading Commission (CFTC) announced that their first-ever Chief Innovation Officer (CIO) and Director of LabCFTC, Daniel Gorfine will be leaving his position to pursue his goals within the private sector.

Gorfine who started his journey with the commission in 2017, was the one to have developed and led LabCFTC, which was described as an endeavor that required, “facilitating market-enhancing innovation, informing policy and ensuring that the CFTC has the regulatory and technological tools,” in keeping up with the ever so evolving the 21st century.

CFTC’s Chairman Health, P. Tarbert is saddened by the news, adding that,

“[Daniel] is a thought leader in the federal government on financial technology issues.”

Furthermore, it seems like P. Tarbert will be the one taking over, as he reported that he is:

“Fully committed to building on the firm foundation Dan has built to further elevate, advance and modernize how we think about applying a sound, principles-based approach to promising new technologies.”

Commissioner Brian Quintenz highlighted many of Gorfine’s strong suits, adding that,

“[Daniel’s] capacity as the Chief Innovation Officer for the Commission and Director of LabCFTC […] has positioned the CFTC at the forefront of the intersection between technological innovation and financial regulation.”

Gorfine has since expressed gratitude in having been able to work along with the likes of Chairman Tarbert, former Chairman Giancarlo and everyone else, adding that he is,

“proud of the work we have done, inspired by innovators we have met.”

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Author: Nirmala Velupillai

Head of South Korea’s FSC Resigns Abruptly to “Widen the Scope” for New Cabinet Members

  • Chairman Choi Jong-ku left the Financial Services Commission in South Korea last week.
  • There are already multiple candidates that may fill his position.

South Korea has been rather strict in the way that they’ve navigated the cryptocurrency industry, but could that change soon? A new report from The Korea Times indicates that the chairman of the Financial Services Commission (FSC) in South Korea, Choi Jong-ku, has officially resigned from his position, as of last week. His departure comes only one day before he would’ve reached his second anniversary. One of Jong-ku’s major decisions, while he was the head of the FSC, was the ban of initial coin offerings (ICOs) in South Korea.

Speaking with reporters, the former chairman explained that his resignation “before the expected reshuffle” was made in an effort to “wide the scope” for the search by President Moon Jae-in for new cabinet members. Many of the people who previously held Jong-ku’s position have resigned around the same length of time with similar circumstances.

Right now, there are a few top candidates that may replace Jong-Ku, including:

  • Eun Sung-soo, the CEO that took over for Jong-Ku at the Export-Import Bank in 2017
  • Yoon Jong-won, who was formerly the Blue House secretary with Korea’s executive branch
  • Kim Yong-beom, who was previously the vice-chairman of the FSC

This is not a complete list of all of the candidates that are being considered for the new position.

Throughout Jong-ku’s time in this position, he was an integral part of dealing with conflicting cryptocurrency proposals from the regulators in the area. However, one issue that he came down strongly on was the increased activity in initial coin offerings in 2018. By March 2018, he publicly condemned ICOs as “irrational” through his efforts to work with the financial authorities in China and Japan to ban them.

He commented,

“[A] fever of speculative investment in cryptocurrencies is ongoing … however, cryptocurrencies are unable to play a role as a means of payment.”

Even with this stubborn stance on both cryptocurrencies and ICOs, Jong-Ku chose to implement legislation that was more favorable for blockchain business. Furthermore, when the Ministry of Justice was considering the shut down of domestic cryptocurrency exchanges in the area, Jong-Ku brought up stricter KYC requirements that made it possible to keep them in operation.

During his tenure, Jong-Ku also decided to grant access to customer data by financial technology and blockchain firms. He also made it possible for consumers to use mobile apps to transact their cryptocurrency.

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Author: Krystle M

SEC Looks for Enterprise Level Blockchain Data Subscription to Counter Risk

SEC Looks for Enterprise Level Blockchain Data Subscription to Counter Risk

The US Security and Exchange Commission (SEC) is looking for Enterprise Level blockchain data subscription to provide clarity to a number of businesses operating in the blockchain space and many who are looking to start a business, but the lack of transaprency on the guidelines deter them from doing so.

The SEC has surely made great improvements from it’s early days and have taken certain steps to provide clarity to these businesses, but it is still an underwhelming effort on their part. According to a notice on

“The United States Securities and Exchange Commission…intends to procure a commercially available off-the-shelf (COTS) enterprise-wide data subscription for blockchain ledger data to support its efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets.”

The SEC wants to procure data for Bitcoin and Ethereum blockchain among other few leading chains of the decentralized space. According to the request for quote,

“At a minimum, the subscription shall include the Bitcoin and Ethereum blockchains…In addition, the subscription shall include as many as possible of the following blockchains: Bitcoin Cash, Stellar, Zcash, EOS, NEO, and XRP Ledger.”

While the United States had quite a passemistic approach towards blockchain and crypto space in early days, like many other countries but realized that the future lies in blockchain and tokenization.

Now many lawamakers have demanded for clearer regulations so that the existing firms as we as the new ones can adhere by them. Minnesota congressman Tim Emmer has mentioned that Blockchain might become an essential tool for the next generation and the US must stay ahead on it than other countries to maintain it’s technical superiority.

The Congress man went on to claim that Blockchain would be world defining technology for the next generation and it would be responsible for drastically changing the way people live. He went on to add,

“This stuff has the potential to completely decentralize the way we live and make the individual central to the way they live their life.”

SEC Faces Criticism For It’s Arcane Attitude Towards Blockchain

SEC has faced critism from different corners for delaying it’s decisions concerning blockchain and crypto space. Recently, the criticism came from within as SEC commissioner Hester Pierce who is often referred to as “Crypto mom” pointed out the commitees arcane attitude towards blockchain during a recent forum. She went onto call the SEC an “old” body who hasn’t been great with innovations.

One of her recent tweet which came in response to Peter McCormack’s description of a recent CFTC regulatory meeting. She replied,

“I finally got a chance to listen to this very interesting conversation. One takeaway is that there is definitely not a harmonized SEC-CFTC view on the Cleveland Browns, which @CFTCquintenz greatly underestimates.”

While the ineteret of SEC in understanding the crypto and blockchain space should not be seen as a sudden change of heart or change in decision making approach, however it is surely a bullish sign suggesting that the SEC is looking to understand the space better and curtail their regualtory framework accordingly.

A recent international data cooperation study has revealed that the expenditure by governments on blockchain technology will increase significantly in coming years.

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Author: Bitcoin Exchange Guide News Team

Trade99 Crypto Asset Trading Becomes New Category-A Member According to Financial Commission


The Financial Commission Has Added Trade99 To Be A Category-A member

The Financial Commission, which is an independent external dispute resolution, EDR, for the foreign exchange industry, has just gone ahead to announce that the Trade99 is a newly approved member.

What You Need To Know About Trade99

The platform has been able to provide a leverage crypto-based asset trading platform. It has been ranked as an A-category member within the agency as of June 4 2019. As a customer on the platform, you have been given access to the Financial commission protection services.

The EDR has gone ahead to provide their clients with a third party mediation platform. One that has been designed to resolve the problems in the vent that the separate parties are not able to agree. One of the mains services offered by the agency is the protection of up to €20,000 per submitted complaint in a statement made by the company.

“simpler, swifter resolution process” than going through the typical regulatory channels.

The Trade99 has joined a very diverse group of independent service providers and brokerages that have been able to utilize the services offered by the Financial Commission. A move that has been considered to be part of their commitment to their clients within the community.

The FX And Crypto brokers Have Gotten A New Member

The principal members within the Financial Commission are Crypto brokers and the Forex, plus the other companies that are operating within the vibrant crypto space.

The agency also went ahead to approve the membership of DealFX, which is an online brokerage; this is all according to the Financial Magnates. The DealFX was also listed as a category A member on the agency.

But this is not all as a PAMM, per cent allocation management module, was also launched, this is as per the statement, the new scheme that has been approved will need to certify the new PAMMs that are being offered by the different brokers within the space. With the use of PAMMs, it will allow the traders to be able to allocate specific amounts of money to an investment manager.

As a result, the manager will go ahead and invest the funds, when a profit is made, they take the commission. With such a system in place, it will allow the inexperienced traders within the space to invest there finds without having to trade the money themselves, a great way to safeguard them. A system that will be able to accelerate the adoption of the concept.

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Author: Lorraine Mburu

Jay Clayton and Crypto Mom Urge SEC to Keep an Open Mind About New Technologies

Jay Clayton and Crypto Mom Urge SEC to Keep an Open Mind About New Technologies

The Securities and Exchange Commission (SEC) is having its first FinTech Forum at the agency’s headquarters in Washington, D.C., where they discussed a range of issues related to digital assets and distributed ledger technology (DLT). The speaker roster includes a dozen legal, financial and technical experts, as well as several key SEC officials.

Jay Clayton, the chairman of SEC has been slowly taking a liking to blockchain technologies. He said:

“There are many challenges in the space and the main way to tackle them is through engagement. We should also take into account what we have done earlier and compare that with what we are trying to achieve now. At the commission, what drives innovations is assessing the industry and competition.”

Clayton shows that the agency is committed to improving compliance in the space in all the country. Earlier this year, the Securities and Exchange Commission released guidance on determining whether some digital assets are investment contracts or not.

At the same panel, Clayton was accompanied by Commissioner Hester Peirce who echoed the same sentiments but was more cautious.

“We need to keep an open mind about Fintech which might mean that we need to reconsider technologically outdated assumptions that underline currency laws. Fintech can mean many things to many people and its effect on how investors communicate with each other and transmit activities are important.”

The mere fact that the SEC is engaging with the crypto industry at all is promising, the mere fact that the SEC is engaging with the crypto industry at all is promising. The SEC is opening a two-way communication flow: market participants are able to express their views, but the SEC is also able to explain why it is approaching regulation the way it is.

“}” data-sheets-userformat=”{“2″:513,”3”:{“1″:0},”12”:0}”>Latest Cryptocurrency Legal Updates and Industry News

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[Domain Disclosure] The crypto-community content sourced, created and published on BitcoinExchangeGuide should never be used or taken as financial investment advice. Under no circumstances does any article represent our recommendation or reflect our direct outlook. We b-e-g of you to do more independent due diligence, take full responsibility for your own decisions and understand trading cryptocurrencies is a very high-risk activity with extremely volatile market changes which can result in significant losses. Editorial Policy \ Investment Disclaimer

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Author: Sritanshu S