The US Securities and Exchange Commission (SEC) has recently clamped down on fraudulent investment platforms by charging GA Investors and several other unnamed platforms. These platforms had been innocuously offering securities, including crypto asset mining pools, via dozens of websites.
In response to this discovery, the SEC has ordered the immediate removal of these websites, which had been targeting victims not only in the US but worldwide. As part of the response, the US securities watchdog has charged GA investors and others with fraud and is seeking a temporary restraining order, asset freeze, and other forms of emergency relief.
The US regulator has also set about the task of recovering the victims’ funds, and is contemplating imposing civil monetary penalties on these platforms. The complaint filed in a federal court in Massachusetts has found that these fraudulent websites had been offering exorbitant returns, as high as 61.9 percent per day, on securities investments as a means of luring potential victims.
Fraudulent investment platforms can be difficult to uncover and they are usually only discovered once victims make complaints about them to the authorities. Regulators are constantly on the lookout for these platforms, although a significant number of fraudsters continue to siphon huge amounts from investors.
In response to this, the Office of Investor Education and Advocacy (OIEA) has issued investor alerts warning about fraudulent crypto trading websites and crypto investment scams. Furthermore, the OIEA and the FBI have jointly warned investors about scammers who falsely claim to be registered, or who impersonate registered investment professionals, in order to convince investors to fall for their scams.
Defrauding investors by way of offering fraudulent investment platforms is an old trick. The SEC’s complaint highlights that GA Investors alone solicited approximately $85,000 from investors by offering them fraudulent securities. The platform’s website offered guaranteed daily returns between two percent and four and a half percent. The website then directed 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 platform did allow for some withdrawal of funds on the part of investors. However, withdrawals ceased once these investors started to seek out larger portions of their investments. The charges against the platform include freezing investors’ funds and misappropriating them.
