CFTC and SEC Announce Tough Stance on Frauds in CryptoverseAuthor: Akshay MakadiyaLast Updated: 21 January 2018 The U.S. Commodity Futures Trading Commission (CFTC) and Securities Exchange Commission (SEC) issued a joint statement on January 19th, 2018, warning of crackdowns on fraudulent schemes in the crypto space. The statement comes after the SEC recently raised concerns about crypto futures trading (ETFs).Also see: Will Ripple Help Lead the Way to Cryptocurrency’s Recovery?Join the Bitsonline Telegram channel to get the latest Bitcoin, cryptocurrency, and tech news updates: https://t.me/bitsonline SEC and CFTC Issue Joint StatementStephanie Avakian and Steven Peikin — SEC Co-Enforcement Directors — and James McDonald, CFTC Enforcement Director, just declared a new vision for cryptocurrency enforcement actions in the United States, noting:“When market participants engage in fraud under the guise of offering digital instruments – whether characterized as virtual currencies, coins, tokens, or the like – the SEC and the CFTC will look beyond form, examine the substance of the activity and prosecute violations of the federal securities and commodities laws. The Divisions of Enforcement for the SEC and CFTC will continue to address violations and to bring actions to stop and prevent fraud in the offer and sale of digital instruments.”The joint statement comes after lawsuits the CFTC filed against two fraudulent crypto investment schemes, both cases being filed in the daunting New York Eastern District Federal Court. Taken altogether, the moves suggest closer governmental oversight over digital currency activities in America. The statement signals a close regulatory look in the U.S. Two Recent Cases In the first aforementioned case — CFTC vs Dillon Michael Dean — the CFTC accused Dean’s Entrepreneurs Headquarters Limited of embezzling crypto assets. The company acquired about $1.1 million USD worth of bitcoin from more than 600 individuals in a pool investment scheme. According to the complaint, the pool then invested the ensuing funds into binary options contracts.In the second case, CTFC vs Patrick Kerry McDonnell, the regulators have accused McDonnell and his company CabbageTech of escaping with clients’ digital assets. The agency has accused McDonnell for masquerading himself as a virtual currency investment expert.The lodged complaint stated McDonnell allured more investments into the fraudulent scheme by claiming to gain 300 percent returns for investors. The complaint also states the defendant cut off communications once the customers paid for services.Interestingly, the CFTC is the entity that allowed the setup of bitcoin futures in the first place. However, the U.S. derivatives watchdog expressed concerns and warned citizens to stay cautious of investment risks in the space.Are such fraudulent crypto schemes pushing away traditional investors from investing in the crypto space? Let us know what you think below. Images via SEC, Wall Street JournalThe post CFTC and SEC Announce Tough Stance on Frauds in Cryptoverse appeared first on Bitsonline.