Federal Government Cracking Down on Bitcoin Fraud

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While Bitcoin has been around quite some time, the digital currency has been all the rage lately as consumers from all walks of life are considering investing in the futuristic financing. It seems like Bitcoin has reached a status that the stock market did before the dot-com bubble burst when taxi cab drivers were even getting in on the action. In fact, if you’re grandparents watch the news, odds are you’ll have to explain Bitcoin to them over the holiday dinner this year.

So What is Bitcoin Exactly?

If you haven’t heard about Bitcoin, it an innovative payment network that utilizes peer-to-peer technology to authenticate funds against a digital ledger. Because its monetary functions are handled collectively by the network of users, there is no need for a central bank to act as a clearinghouse for funds. This “magic” that makes Bitcoin work as an actual currency is called blockchain, and is such an amazingly effective way at exchanging funds, that banks themselves are looking into ways they can apply the same technology to US dollars. At first shrugged off as monopoly money for tech geeks, it is now front in center in all the major media outlets as the value continues to climb.

SEC Cracks Down on Bitcoin

The U.S. Securities and Exchange Commission is paying attention to the cryptocurrency Bitcoin, and for good reason, the currency reached a record high of $17,000 this week. Just like any other facet of civilization, where some are prospering, others are conjuring up ways to cash in. The SEC

The SEC announced that it was stepping in to halt a $15 million dollar initial digital currency offering from a company called PlexCorp. The structure of the offering was to offer investors digital currency instead of ownership shares. The main cause for concern from regulators was the lofty returns that PlexCorp claimed investors could expect. The SEC further claims that they found no evidence that the company was actually creating a cryptocurrency and that the proceeds of the initial offering were to go directly to the company’s two founders for personal luxuries.

While Bitcoin isn’t a scam by any stretch of the imagination, it is certain there will be future schemers that will attempt to take advantage of unknowing or gullible first-time investors in digital money. Make sure you contact a financial specialist or Cincinnatti bankruptcy attorney before agreeing to buy any amount of digital currency. Additionally, always make sure that you do your research before buying any investment.

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