The financial watchdog disclosed that it had received complaints from investors claiming that the firms, including Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Yong Ying Global Investment firm, Unison FX Limited and Hekamenltd/Tosal Markets Limited, have defrauded at least one user on their respective platforms.

Two Copycats Impersonating Popular BrandsCrypto Broker

The DEPI also mentioned two firms impersonating reputable brands in the crypto industry, such as eth-Wintermute.net and UniSwap LLC, as part of the companies engaging in fraud while naming the fake brokerage companies that have scammed users.

These two companies are cashing out on the popularity of Uniswap, a decentralised exchange (DEX), and Wintermute, a centralised market maker based in the United Kingdom.

The regulator has warned consumers to be wary of these firms, which have been set up to steal users’ funds.

Committed to Protecting Investors

Earlier in June, the financial watchdog responsible for enforcing California’s lending and banking rules alerted investors to about 26 suspicious crypto platforms. The warnings were issued due to user complaints about the brokerage firms and websites.

The DEPI said these investors had lost funds ranging from $2,000 to as much as $1.2 million to the fake companies.

While the previous scam alerts surpassed the current one regarding the number of companies involved in the crime, the financial regulator said it’s committed to protecting California residents against scams and fraud in the industry.

California Securities Law Violation

In September, the DEPI issued a cease and desist letter to 11 crypto firms for violating California securities laws.

According to the press release, the firms offered and sold unapproved securities to investors in the country, failing to comply with the securities legislation. Out of the 11 sanctioned firms, only ten engaged in material misrepresentations and nine solicited funds from users to trade digital assets on their behalf.

The regulator noted that these schemes usually targeted new investment opportunities such as crypto and had previously used the same techniques to defraud investors in the oil, gas and cannabis sectors.

(By William A. Frederick)