FTC temporarily halts four cryptocurrency chain referral schemes

On March 16, 2018, a federal US District Court judge in Florida unsealed a March 12, 2018, temporary restraining order he had granted at the request of the Federal Trade Commission (FTC) against four individuals and their companies, relating to allegedly deceptive acts or practices involving cryptocurrencies. The order is set to expire on March 26, 2018, but the FTC already has requested a longer-lasting temporary or permanent injunction against the parties. According to the Complaint, the facts in each matter were similar and straightforward. Each defendant used social media, websites and conference calls to promote what the FTC characterized as “chain referral schemes” using cryptocurrencies. In general, the FTC stated, each defendant requested individuals to contribute 0.1 Bitcoin or Litecoin (worth approximately $100 at the time) and then convince others to do the same. Each consumer would earn commissions for each individual they convinced to provide the…

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