Blockchain court cases have risen drastically in the last two years. In one case that was initiated early last year, a U.S. attorney brought a case against “One Coin”. One Coin was known by many in the cryptocurrency industry as an up-and-coming cryptocurrency. Shortly after, its entry into the cryptocurrency market however, investors learned that the currency was created under false pretenses. A Manhattan attorney revealed that the Bulgarian-based company had created the currency in order to defraud investors. In discovery, it was revealed that One Coin had concocted a pyramid scheme that would leave investors out of almost $4 billion. As One Coin has been in operation since 2014, millions of investors have been involved with the foreign companies scheme that has spanned almost 5 years.
How did the ponzi scheme start?
One Coin would issue coins to purchasers and purchasers would be encouraged to sell coins as investment packages. While One Coin framed itself as a private blockchain company, the U.S. Department of Justice found no evidence of any feasible operations. One Coin was found to be selling fake coins with no value.
With the SEC now involved, some investors have sought to recoups whatever they can from the pyramid scheme
How do I protect myself from a blockchain scheme?
Prior to signing off on an investment, you will want to ensure that you have conducted thorough research on the matter including some of the following:
- Conduct your research and exercise due diligence into the company you wish to invest in
- Review investor transaction histories to determine whether anomalies exist in accounting, financials or crypto-purchases
- Review independently audited statements for the last 2 years (at least) of operations
- Last, but not least, ask questions. If you have any questions or concerns about the potential investment, do not be afraid to ask. The unasked question is the only “silly” question.
While the list above is not exhaustive, they are the absolute minimum requirements that you should consider prior to investing.
If you’re a potential investor or current investor with concerns about your cryptocurrency investment, get in touch with one of our cryptocurrency attorneys. Call us at 604-930-9578 or 1-800-930-9986. Our experienced counsel are ready to assist you with your cryptocurrency lawsuit.