California Begins Crackdown on 11 Crypto Companies Accused of Ponzi Schemes – Regulation Bitcoin News

The California Department of Financial Protection and Innovation (DFPI) has taken action against 11 cryptocurrency companies for allegedly violating California securities laws. Nine of the firms solicited funds from investors to trade cryptocurrencies on behalf of their clients. One of the companies indicted, Metavarus, plans to develop software, and another company claims to be a “decentralized finance (defi) platform.”

11 Crypto Firms Targeted by California Department of Financial Protection and Innovation

California’s financial regulator DFPI has targeted crypto asset companies, and on Tuesday the financial regulator launched an “arm” against nearly a dozen digital currency-specific entities. DFPI “issued a position statement against 11 separate entities in violation of California securities laws,” the regulator said on September 27, 2008.

California Launches Crackdown on 11 Crypto Firms Accused of Ponzi Schemes

“The firms are all alleged to have used investor funds to pay profits intended to other investors in a Ponzi scheme,” a DFPI press release said. “In addition, each entity had a pyramid scheme of referral programs. The entities promised investors commissions if they recruited new investors, and further commissions if the investors they recruited in turn brought in new investors.”

DFPI’s action follows a cease-and-desist order it sent to crypto lender Nexo on Monday. Nexo has been accused of offering and selling “ineligible securities in the form of demand product labels” since “at least June 2020,” the regulator’s complaint details. The 11 orders issued on Tuesday detailed that the institutions offered “known examples of high-yield investment programs (HYIPs)”. The 11 crypto companies named in the ban and restraining orders include:

  • Cryptos OTC Trading Platform Limited d/b/a COTP
  • High Pass LLC
  • Greencorp Investment LLC
  • Metafi Elders Pty Ltd d/b/a Metafi Elders
  • Pegasus
  • Polinur ME Limited
  • Remabit
  • Site business
  • Citrix business
  • Vexam Limited
  • World Otover Savings Limited d/b/a World OTC

In Tuesday’s announcement, DFPI Commissioner Clotille Hewlett commented on the actions taken against crypto firms accused of Ponzi-like schemes. “DFPI will continue to protect California consumers and investors from crypto fraud and scams,” Hewlett said. “These actions not only protect consumers, but also ensure that California is the premier global location for responsible crypto asset companies to start and grow,” the commissioner added.

Tags in this story

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What do you think about the California regulator cracking down on 11 different crypto companies? Let us know what you think about this in the comments section below.

Jamie Redman

Jamie Redman is the news lead at and a financial tech journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written over 6,000 articles for News about the disruptive protocols emerging today.

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