Skip to main content

https://www.coindesk.com/finra-beware-public-stocks-tout-cryptocurrency-connection/

The Financial Industry Regulatory Authority (FINRA), a self-regulatory organization (SRO) in the U.S., has issued a new warning about cryptocurrency-related stock fraud.
In a new post on its website, FINRA urged investors to do their homework when it comes to public companies that tout their activities involving blockchain or cryptocurrencies.
FINRA, an organization which provides testing and licensing for registered brokers and financial professionals, said that would-be investors should be "cautious" when assessing solicitations from such firms that seek to fund cryptocurrency initiatives "without the business fundamentals and transparent financial reporting to back up such claims."
The organization wrote:
"Especially in today’s 'hot' cryptocurrency environment, it’s easy for companies or their promoters to make glorified claims about new products, services and other cryptocurrency-related connections. And, even when legitimate companies flock to a hot, new sector, fraudsters almost always follow suit, exploiting the news to launch their latest frauds du jour."
The warning is perhaps a timely one, given several recent moves by the U.S. Securities and Exchange Commission to halt trading of several publicly traded stocks, as well as a swath of announcements by previously uninvolved companies that are now working on blockchain projects.
Among the latter group is Long Island Iced Tea Corp., which announced today that it was changing its name to Long Blockchain Corp after "shifting its primary corporate focus towards the exploration of [and] investment in opportunities that leverage the benefits of blockchain technology." As reported by Bloomberg, the stock price for Long Island soared by more than 200 percent in the wake of its announcement.
In August, the SEC warned investors about the risk of public stock pump-and-dump schemes that use cryptocurrency as a marketing tool.
"These frauds include 'pump-and-dump' and market manipulation schemes involving publicly traded companies that claim to provide exposure to these new technologies," the agency said at the time.
FINRA image via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Comments

Post a Comment

Popular posts from this blog

Ripple (XRP) Cryptocurrency To The Moon Today

Crytocurrencies are the next big thing in the global economy and there are several virtual coins such as Bitcoin Cash, Ehtereum, Ripple, Litecoin and more. All those following the cryptocurrency market are becoming more and more interested in Ripple. Could it be the next best thing happening in the crypto space? Buy some Ripple today Or at least that is what some are planning of doing, even before it gets listed in Coinbase. Those who are novice at this have to know that they can get XRP through exchanges using Binance, Bitfinex, Coinone or Kraken. Ripple’s parent company locked 55 billion XRP at the beginning of December, on the 8 th  of December and by the 15 th  exchanges (cex.io) listed XRP price at around $1.57. A price surge happened due to loyal Ripple disciples. Now, the value of the XRP is closer to $0.922, meaning there has been a 620% increase from the first price surge. CNN believes it is one of the best cryptocurrency so far CNN has named Ripple ...
Post a Comment
Read more

Get ready for a 2018 cryptocurrency crime wave

With bitcoin recently pushing past the $19,000 level ( despite crashing hard on Friday)  and a slew of other cryptocurrencies like ethereum, litecoin and Ripple making rapid price gains in its wake, it’s never been a more bullish time for digital currency investors. But there is always a price to be paid for such success and in this case cryptocurrency’s massive surge in popularity is likely to trigger an epic wave of crime.   Already on December 4th, the  SEC announced  it shut down an initial coin offering (ICO) for allegedly defrauding investors of $15 million. However, while fraud is an inherent risk of cryptocurrency, as wallets, exchanges and ICOs all take place with little to no legal or regulatory oversight, it is hacking which presents a far more serious threat for investors because it is so widespread and so difficult for the average person to avoid.   Hacking has been a recurring problem for this industry from the very beginning. In fac...
Post a Comment
Read more

GTBANK Reportedly Experimenting With Crypto In Nigeria

One of Nigeria's biggest banks, the GTBank has reportedly expanded into  experimentation with cryptocurrencies. Users of the 737 mobile service may have seen GT coins being credited when transactions are made. The 737 service is already one of the most extensive  mobile banking solutions effective in the country, as GT Bank aims to add another layer of  functionality to their payment gateway. The GTBank has already participated in a number of crypto technology conferences being part of the CBN group. Currently, the coins are being distributed when users make transactions using the 737 mobile service. It is predicted the coins being tested may allow the bank to develop the technology further to facilitate business transactions too rather than focusing on personal use. This comes as the GTBank have also delved into blockchain and crypto technology previously. Used as a basis for their GT Tokens, the technology was used essentially as a form of identity verificatio...
Post a Comment
Read more