Yesterday, DFPI reported that they have carried out legal actions against several cryptocurrency platforms for infringement of the state security directives.
They are; Cryptos OTC Trading Platform Limited d/b/a COTP, Elevate Pass LLC, GreenCorp Investment LLC, Metafiyielders Pty Ltd d/b/a Metafi Yielders, Pegasus, Polinur ME Limited, Remabit, Sity Trade, Sytrex Trade, Vexam Limited, World Over the Counter Limited d/b/a World OTC.
Concerning this, an executive order was signed earlier on May 4, 2022, to ensure ethical innovation, strengthen California’s entrepreneurial sector, and safeguard citizens.
This order requires the department to commence regulatory efforts to eliminate breaches of key consumer finance regulations and to promote cognizance among citizens about the advantages and hazards connected with the cryptocurrency ecosystem.
Regarding the firms, their modes of operation have been likened to fraud. They promote a reward system that promises to incentivize people that bring in new customers, with the profit margin increasing with the number of people brought onto the various platforms.
A number of these platforms have requested money to process transactions. One claimed to be a DeFi platform, others asked for money to create a Metaverse society, and almost all of them reportedly cheated and misled their users.
These scams, which expose several cryptocurrency enthusiasts to financial issues, frequently target the most recent investment chance. Citizens who have been subjected to unjust, illegal, misleading, or oppressive actions by these firms are encouraged to complain to the Department. The DFPI has promised regulatory actions against these perpetrators.
However, more crypto platforms will pop up with an increase in technological advancement. There would be platforms with fragile foundations aimed at scamming people. For this reason, enthusiasts and investors must carry out thorough research before they dive into any project.