Wednesday, 23 May 2018

N.J. moves to shut down Bitcoin-based investment site

State regulators on Friday ordered an internet investment site to stop advertising to customers in New Jersey, claiming the company was cashing in on the buzz surrounding cryptocurrencies and defrauding investors.
The state Bureau of Securities issued an emergency cease and desist order to Bitstrade, which takes payments in the form of the digital currency Bitcoin and claims to provide 10 percent returns by placing the funds in an "investment pool" used to trade on the stock market.

Bureau Chief Christopher Gerold said in a statement Friday the company was "a prime example of a company seeking to capitalize on the cryptocurrency craze."

Authorities say the company raised a number of red flags. For one, it wasn't registered to sell securities in New Jersey.

On its website, the company lists two addresses in California in Arizona, but the California address is non-existent, and the Arizona location is actually the headquarters of GoDaddy.com, a popular website hosting service.

A Bitstrade representative could not be reached for comment. The company has no listed phone number, the "contact us" section of its website appeared not to function and a message to its support e-mail address was not immediately returned.

On its website, Bitstrade describes itself as a private banking service "for the masses."

"From now on, you don't need thousands or millions to have a private trader working for you day by day," reads the "About" page. "You don't need to make a huge investment to have a personal account assistant assigned to you. With Bitstrade all of these are possible from only $10.00!"


Authorities say the company is violating New Jersey's Uniform Securities Law and withholding key information from potential investors, including the names of its corporate officers and the nature of its investments.

Bitcoin and other cryptocurrencies have been around for nearly a decade, but their popularity as an investment vehicle have grown exponentially over the last year. Because the currencies are largely unregulated, authorities say they have become a valuable tool for internet scammers.

Last month, the state Attorney General's Office issued an advisory urging consumers to investigate potential investments involving cryptocurrency.

"Understanding what is being sold is the best armor an investor has against fraud," said Sharon Joyce, the acting director of the office's Division of Consumer Affairs.

source: nj.com

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