4 December 2022

Crypto Briefing: US Government Launches Its Own ICO Scam

Share This Story

Circle, a peer-to-peer payments firm, has become the latest crypto-related company to join the unicorn club. Unicorns are tech startups which reach a valuation of $1bn, and in its latest Series E funding round Circle raised $110m, which would place the overall value of the company at over $3bn. The goal behind the company is to create a fiat-backed, but blockchain native, token. Their Circle USD Coin, or USDC for short, will be pegged one-to-one to the dollar and will operate as an ERC-20 coin. They foresee this as a way to keep all the beneficial aspects of cryptocurrencies, while removing many of its negatives, including the high volatility cryptos experience. A central institution will hold the necessary amount of US dollars, and holders of USDC can cash in the coin for fiat currency from this reserve. Jeremy Allaire, CEO of Circle, hopes to launch the coin by the end of summer 2018.

Tax day has come and gone in the US. The 17th of April, a Tuesday, saw Americans have to file their tax returns and make sure they had the cash necessary to pay their federal government. It led to a fall in the price of cryptos, as many cashed out to raise the needed funds. While this may be the case for many crypto enthusiasts in coming years, those in Seminole county can at least pay for local services offered by the county in either Bitcoin or Bitcoin cash from this summer onwards. In an effort to reduce the administration and collection costs of things such as property tax, licence fees, and vehicle registration fees, Joel Greenberg, a tax collector for the county said the move was to:

“…bring government services from the 18th century into the 21st century and one way is the addition of cryptocurrency to our payment options.”

That is not the only way some aspects of the government in the US are embracing cryptocurrencies. The Securities and Exchange Commission, the US body in charge of enforcing financial regulations, seems to have broken its own rules. It recently launched an ICO “scam” website, offering HoweyCoins to investors. The coin is marketed as a way of circumventing the nickel and dime charges of travel costs. However, this is not a case of a government agenecy gone rogue. The website is intended as an educational tool, and it sends any user duped into investing to the SEC resources that outline how to spot a fraudulent Initial Coin Offering.

The name of the coin echoes the famous Howey test, which governs whether or not a transaction should be treated as a security or not. The website features all the hallmarks of an ICO exit scam. It hosts a plausible, though vague, white paper, twitter endorsements, a team of fake personalities, and guaranteed returns. There is a countdown clock too, increasing the fear-of-missing-out response in investors, which has two weeks remaining on it. There is no indication if the clock will reset after that period, or if the website will be taken down.

In response to the threats of fake ICOs, Bing has become the latest online service to ban the majority of cryptocurrency ads. Twitter, Google, and Facebook banned the practice at the beginning of the year, and it is only surprising that Microsoft took so long to follow suit. LinkedIn, which is owned by Microsoft, banned cryptocurrency ads at the end of March. Eric Ly, the co-founder of LinkedIn, opined that the current spate of bans will be rescinded once cryptos become a safer investment. The number of scams and high volatility, which both open up potential investors to considerable losses, will eventually be diminished, and once that happens advertisers will welcome crypto ad revenue again. The ban was announced on Tuesday and it took a toll on the price of leading cryptos.

Before the news about Bing broke Bitcoin (BTC) seemed to be holding its own, though it was slightly down on how it started the week. It began at $9,346.95 and briefly climbed to reach a high of $9,396.04. From there it crashed down to a low of $8,181.64 in the aftermath of the Bing news. It then rallied a little to close out at $8,330.04.

Ethereum (ETH) rose from its starting price of $754.15 to reach a high soon after of $766.48. Following this small gain, it declined rapidly to bottom out at a price of $644.07, though it did recover somewhat toward the end of the week to finish out at $702.69.

Things did not turn out too much differently for the third-largest coin by market cap. Ripple (XRP) began the week at $0.807, but it never rose above this price. It followed the trend and fell to its seven-day low of $0.671. A small rally occurred, and it came out of the week at $0.700.

ZCash (ZEC) bucked the trend. From a starting point of $275.90, it remained steady around that price until Monday afternoon, when it mooned to $386.40, a gain of over 40%. The surge was fueled by news that the Winklevoss twins, on their Gemini exchange, had become the first licenced exchange for the coin, after gaining regulatory approval. ZCash will be tradable on Gemini from Tuesday the 22nd of May.

Click here for the original article from Market Mogul.
Join Our Online Community
Join the Better Way To Retire community and get access to applications, relevant research, groups and blogs. Let us help you Retire Better™
FamilyWealth Social News
Follow Us