Cryptocurrency and its nature have troubled investors for a decade. Where some have made money from it, and some are still creating a considerable amount of wealth by treating them in cryptocurrencies like Bitcoin, others are trapped in fraudulent activity and lose a huge part of their hard-earned cash.
US regulation has presented over 90 cases in these two years, which speak of the same loss history. Both state and federal regulators were able to recover US $ 36 million from the lost amount, which is only part of the total loss. The nature of the cryptocurrency that made it so famous has become the cause of this loss. The regulation is deficient in finding to recover more money because of the anonymous nature and without borders of the crypt.
A study published in a well-known journal stated that the number of cases registered by regulators was lower during the market of upright crypts, the number of archived cases began to increase when the cryptography market started to fall. This can be shown by paying attention to the fact that, in the previous year, regulators presented only four cases, however, last month the United States Securities and Exchange Commission registered five cases.
The state regulators brought more than 70 crypto-enforcement actions last year. However, none of these actions helped to recover the lost money.
Among all the alleged frauds occurred in these years, the BitConnect was the most important. BitConnect is now under legal investigation. The Securities and Exchange Commission and state regulatory authorities are both investigating the matter. BitConnect had to discontinue its operations after the Texas State Securities Board issued a cease-and-terminate order on the company. The company had a market value of about $ 2.8 billion at the time.
The Texas State Securities Board has accused the company of violating certain sections of the Texas Securities Act. These provisions do not allow the sale of any securities without the authorization of the Securities Commissioner. Clearly, BitConnect failed to follow it.
The Texas State Securities Board published a report while raising an accusation on BitConnect. The report states that the company is part of fraudulent activity as it does not reveal the identities of the principal of the company; in addition, the company has not shown its way to generate revenue and how it will pay its investors the 120% annual interest promised.