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Tuesday, February 7, 2023

Bitcoin Once Again Slides Down

The Bitcoin (BTC) price has dipped to $16,400 recently following the news that three more executives from Genesis Trading, an arm of New York-based investment firm Genesis Global Trading, have entered into a partial settlement with the U.S. Securities and Exchange Commission (SEC).

The new settlement, which was filed in federal court in New York, is a partial settlement of the charges brought against six executives of Genesis—including CEO Michael Moro and COO Kevin Portnoy—by SEC.

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The original complaint against Moro et al., which was filed on Dec. 11, charged them with fraudulently soliciting investors to purchase shares of Bitcoin Tracker One (CXBTF), an exchange-traded product created by an affiliate of VanEck/SolidX that tracks bitcoin prices.

Bitcoin Goes Off Radar Again

The SEC alleged that investors were misled by false claims about the investment methodologies used by VanEck and SolidX to formulate their tracking product’s price and trading volume data; this led many investors to believe they could accurately predict future price movements using those data points. The complaint also claimed that these executives knew all along what they were selling was not an accurate representation of bitcoin prices but rather an “artificial construct” designed specifically for profit maximization at the expense of investors (i.e., pump-and-dump).

As per the report, Genesis Digital Trading LLC CEO Michael Moro and two executive vice presidents, Patrick J. O’Hara and Joseph Wiener, have agreed to several restrictions on their activities.

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They are not allowed to have any involvement with any broker-dealer or exchange for a year. In addition, they will need to take part in regular ethics courses and conduct periodic training sessions for employees of Genesis Digital Trading LLC about cybersecurity risks and compliance matters relating to cryptocurrency trading platforms. The FTC said that it was also imposing a $1 million fine against the company over its handling of customer funds during an outage in January 2019 that caused customers’ accounts to be frozen until February 2019 when the platform was relaunched after undergoing extensive security improvements.

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