The Commodity Futures Trading Commission has brought charges of fraud and misappropriation of user cryptocurrency against Vista Network, which is situated in California.
Following the collapse of the FTX exchange and Terra Luna UST in 2017, which caused a loss of around $100 billion, the United States financial watchdogs have expanded their reach of cryptocurrency monitoring.
The victims of the Terra Luna hack may never receive compensation, and as a result, regulators in the United States have applied significant pressure to the stablecoins industry. In addition, Congress has engaged in a substantial amount of conversation around algorithmic stablecoins.
Paxos, a leading tokenization infrastructure platform well-known for the Binance-backed BUSD issuance, has been asked by the NYDFS to cease the issuence of new stablecoins.
The SEC contends that the stablecoins currently on the market are unregistered securities, yet, whales have moved in mass migration from Circle's USDC and Tether's USDT to the Bitcoin market.
Analysts of cryptocurrencies have predicted that financial authorities in the United States will continue to enforce stricter regulations.
Allegations Against Vista Network
Per the official statement, the CFTC has alleged Vista Network Technologies (Vista), a company based in California, and Armen Temurian, the CEO of Vista, of misappropriating over $7 million worth of digital assets belonging to customers and soliciting more than $7 million worth of those assets.
The Commodity Futures Trading Commission (CFTC) has filed a complaint in the US District Court alleging that Temurian and his company engaged in fraudulent activity similar to a Ponzi scheme by soliciting Bitcoin and Ether from investors and then misappropriating the funds.
Gretchen Lowe, the acting director of enforcement for the CFTC, stated that "this action underscores our continuous commitment to utilizing the tools at our disposal to hold corrupt actors responsible in the digital asset area. This is just one more example of the CFTC's efforts to safeguard retail customers from fraud linked to digital asset commodities," said the agency.
Reportedly, between 2017 and 2018, Vista and its CEO advertised that the company would trade customers' digital assets and earn a 2.5 percent return or double in just 80 days. This claim was made in connection with the company's trading of digital assets.
In addition, Temurian assured the investors in cryptocurrencies that robot traders with a high percentage of successful trades will handle the trading of digital assets.
Despite this, the CFTC noticed that Temurian and the firm had yet to gain any prior experience trading robots or to work as financial advisors. According to reports, Temurian paid older customers using digital assets contributed by new investors.
This week, the SEC of the United States issued proposed investing rules to combat dishonest financial advisors.
Gary Gensler, the chair of the SEC, believes that the proposal benefits regular investors.
"I support this plan because it would ensure that advisers don't unlawfully utilize, lose, or abuse clients' money," Gensler said. "By utilizing significant authorities that Congress provided us after the financial crisis, it would also help ensure that I support this idea." (1)