Crypto Investment Platform Bitstrade Receives Cease And Desist Order From New Jersey Regulatorbr>
New Jersey’s Bureau of Securities has issued a cease and desist order to crypto investment platform Bitstrade for allegedly selling unregistered securities in the state.
Founded in 2016, Bitstrade claims to be “a registered United States company providing Private Banking service to the masses.” The company purports to guarantee “outstanding returns” by “working as an investment pool, collecting multiple lower value investments and grouping them into one single huge investment, using those funds to trade on the stock market.”
The regulators said Bitstrade was not licensed to offer securities in the state of New Jersey, and that the company was “violating the law” by not disclosing key information about its operations. This includes details such as the addresses of the company, the names of their officers, as well as the risks of investing in Bitstrade.
“We found that Bitstrade is violating the State’s Uniform Securities Law by offering investors an unregistered security in the form of an investment pool that purportedly guarantees up to 10 percent returns which accrue daily on investor funds,” the Bureau of Securities said in a statement. “Bitstrade is not registered to sell securities in New Jersey.”
New Jersey Attorney General Gurbir S. Grewal said that regulators are actively responding to fraudulent crypto-cloaked securities offerings, and that Bitstrade is a prime example of a company seeking to capitalize on the cryptocurrency craze.
“The Bureau’s action today reinforces our commitment to protecting investors as they navigate the uncharted and largely unregulated domain of cryptocurrency-related investments,” said Grewal. “We want to make sure that investors tempted to cash-in on the cryptocurrency rage aren’t being lured into sending funds to an anonymous Internet entity without knowing where the funds are going or how they’ll be used.”
Various state governments across the US have been cracking down on suspected cryptocurrency scams over the last several months. In Jaunuary, the Texas Department of Banking issued an unconditional cease and desist order to crypto banking platform AriseBank for allegedly promoting and offering banking services while not chartered or authorized to engage in banking in the state.