Cryptocurrencies Rise as SEC Crackdown on ICO Scams Intensifies

Virtual currencies are on the rise on Tuesday, with Bitcoin and Ripple rising on the news that the United States Securities and Exchange Commission (SEC) is cracking down on initial coin offerings (ICOs). Recent reports suggest ICOs are highly fraudulent at a rate of 25% to 81%, with many failing to move past the funding stage.

The SEC has begun cracking down on ICOs along with many states that claim a majority of ICOs are unregistered securities.

The founders of Centra Tech were charged by the SEC for misleading investors and failing to register as an ICO. Centra Tech is backed by Floyd Mayweather, former boxing champion. The company’s founders Shorab “Sam” Sharma and Robert Farkas are both accused of misleading investors, with claims that the company had partnered with Visa, MasterCard and Bancorp.

The duo scammed investors out of $32 million using celebrity endorsements and marketing schemes.

“Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors,” states Steve Peikin, co-director of the SEC’s Division of Enforcement.

Cryptocurrencies across the board have benefitted from the crackdown, including bitcoin, which rose over 5% in early morning trading to $7,388. Ethereum rose 4.38% to $404.16, Litecoin rose 5% to $125.78 and ripple is up 8.62% to trade at $0.533.

In other ripple XRP news, Uphold announced last week that the company will be adding zero-fee Ripple transactions. No transaction fees will be present for the first 5 million XRP purchased. Users will also have the ability to convert their holdings into seven additional cryptocurrencies and 23 fiat currencies.

Uphold’s CEO cites a huge demand for XRP as the reason for the company adding XRP to their platform. Uphold will be one of the first platforms to adopt XRP and make it easily accessible for users.

Bitcoin Cash rallied on Monday, ending the day at $662.9, up 3.37% on the day. The currency’s growth ended a seven-day streak of losses helping erase a 5.98% dip on Sunday. Stellar (XLM) is also rallying on Tuesday.

The fastest growing coin in added 10% to its value to hit $0.23. Stellar’s trading volumes remain a concern, as overall trading volumes remain low. Stellar is slated to surpass in the top 10 rankings.

XLM and XRP are often compared thanks to the currencies both having a large supply and low prices.

Bitcoin is trading at $7,388 on Tuesday morning, with the currency bouncing back from below $7,000. The currency has fallen from nearly $20,000 at the end of 2017 and has come under increased regulatory pressure. The currency had its worst first quarter since its reveal, losing $119 billion in value.

Bitcoin climbed over the $7,000 on Monday even as stocks slipped into negative territory on increased fears of a tariff war between the United States and China. President Donald Trump has also openly tweeted about Amazon, causing the company’s stock to plunge. Trump is calling for Amazon to pay its fair share in taxes.

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.