New Jersey cracking down on fraudulent cryptocurrency investment schemes

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4 mins read


A representation of the virtual cryptocurrency Bitcoin

 NEWARK – Acting Attorney Andrew J. Bruck today announced that the Bureau of Securities has issued five orders to companies touting fraudulent investment opportunities relating to cryptocurrencies, directing them to stop operating in violation of New Jersey law.

The five summary Cease and Desist Orders issued today describe how the companies collectively have used a variety of tactics common in investment scams to lure investors into their fraudulent cryptocurrency-investment schemes. These include vague promises of profit, bogus client endorsements, limited and misleading disclosures, and failure to identify the company’s principals, among a smokescreen of other fraudulent statements and omissions. None of the entities is registered with the Bureau to offer or sell securities or act as a broker-dealer in New Jersey.

At least three New Jersey investors were scammed by the companies. They ultimately were unable to withdraw any of the purported earnings from the accounts they established with the companies or to recover their original cryptocurrency investments, which together totaled nearly $90,000.

“Online scammers are exploiting the public’s interest in cryptocurrency investment opportunities,” said Acting Attorney General Bruck. “But we’re fighting back. Our Bureau of Securities is holding accountable those attempting to rip off New Jersey investors, and we’ll continue working to protect the residents of our state from scams and frauds.”

“The anonymity and decentralized nature of the virtual currency investment market make it fertile ground for internet scammers,” said Sean P. Neafsey, Acting Director of the Division of Consumer Affairs. “It is imperative that investors do their homework when considering cryptocurrency investments or risk significant financial losses.”


The Bureau found that the online entities covered by today’s orders have been engaging in fraud in connection with the offer and sales of securities on their websites in conduct that collectively includes:

In addition, the Bureau found that the entities have been violating New Jersey Securities Laws by offering and selling unregistered securities or by acting as unregistered broker-dealers in New Jersey.

The Bureau found that at least three of the online entities defrauded New Jersey investors out of their funds. They are:

The other entities subject to today’s Cease and Desist Orders are:

“Our actions today are a reminder to investors that the time to investigate a cryptocurrency-related investment is before you hand over your money. Unfortunately, by the time these investors realized the truth about these sham platforms, their investments were gone,” said Christopher W. Gerold, Chief of the Bureau of Securities. “Raising public awareness of crypto-related fraud and the risks associated with this volatile market is a crucial part of the Bureau’s work. An informed investor is the best protection against financial predators trolling the virtual currency market.”

The Bureau’s investigation was handled by Deputy Chief Amy Kopleton and Investigator Dina Venero of the Bureau of Securities, within the Division of Consumer Affairs.