The Central Bank of Argentina stated that they are investigating crypto investment firms. The central bank revealed that it is investigating cryptocurrency investment companies promising extraordinary returns. These aren’t reasonable. According to the bank these companies may be Ponzi schemes and they are currently being investigated by the bank for possible legal action.
Central Bank of Argentina investigates Crypto Investment Companies
Yesterday’s statement by the Central Bank of Argentina outlined their plans to take action against cryptocurrency investors. The institution announced it is scrutinizing some companies that offer “returns through operations with crypto assets and cryptocurrencies that are not compatible with reasonable parameters in financial operations.” The bank is also alerting users about the use of these platforms whose performance and investment risk cannot be evaluated by the institution.
Already, the bank took action against the companies located in certain regions of the country. It inspected them via the Superintendency of Financial and Exchange Entities and issued cease and desist orders. Now, the bank will take judicial action against these administrators.
Concentrated Activities
These suspected operations concentrated their efforts on specific areas of Argentina, and used publicity campaigns to attract more investors. The Central Bank of Argentina detected such activity in two provinces, La Rioja and Catamarca, that aimed to gain followers to participate in “non-transparent asset management schemes.”
Cryptocurrency-related scams are not new to Argentina, but have multiplied this year. Bitcoin Argentina, a non-governmental organization that monitors cryptocurrency in Argentina, warned earlier this year against such a scheme. Javier Madariaga (CEO of the NGO Bitcoin Argentina) stated that:
It is becoming clear that Ponzi and pyramidal Ponzi schemes using crypto have been repeated across different parts of the country. One common factor is an intermediary promising a high economic return through a capital contribution. That is not guaranteed with any investment.
The Central Bank of Argentina is also taking steps to stop the growth of such operations. It revealed to these firms that the Central Bank of Argentina is currently contacting them to request they cease investment activity and is considering whether legal action should be taken against the Ponzi scheme.
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