The U.S. Securities and Exchange Commission filed 38 civil complaints against cryptocurrency investment advisory firms accused of displaying fraudulent SEC certificates and misrepresenting their registration status to investors.
Named defendants include CryptoOrbit, Ftaexchange, Pinnacle Crypto Exchange Inc, Quantum Financial Institute Ltd, RBH Infinity Exchange Inc, Web3 University, Apexium Securities Ltd, THEVGPRO Ltd, and Absolutaris Base Limited. The SEC is seeking injunctions from a federal court to impose civil penalties and revoke the defendants' reporting exemption privileges for future advisory filings.
False Registration Claims
According to the SEC, the defendants made materially false statements on Form ADV filings and failed to provide required disclosures. The firms allegedly used SEC registration numbers that were never issued and claimed valid registration status that did not exist.
Quantum Financial Institute, for example, claimed registered investment advisor status and marketed a "multi-dimensional intelligent investment system" with courses on cryptocurrency strategies. Pinnacle Crypto Exchange advertised itself as having completed SEC registration when it had not. THEVGPRO marketed a Bitcoin-backed "settlement security fund" with registration numbers the SEC never approved.
Ftaexchange issued a press release touting digital asset trading and custody services with claimed SEC registered investment adviser status. RBH announced three cryptocurrency tokens alongside assertions to "invest in the future — act now."
Geographic and Contact Inconsistencies
SEC staff reported difficulty contacting many of the defendants. Several listed phone numbers were disconnected or belonged to unrelated businesses, and postal mail sent to listed addresses was returned as undeliverable.
Multiple firms claimed to operate from Colorado addresses while using Hong Kong IP addresses to access systems. Web3 University allegedly accessed FINRA's filing system from the People's Republic of China while listing an undeliverable Colorado Springs office address.
Enforcement Actions
The SEC alleges violations of Sections 204(a) and 207 of the Investment Advisers Act. FINRA has removed non-compliant forms for these advisors from adviserinfo.sec.gov. The SEC has not quantified investor losses in the initial complaints.
The Better Business Bureau logged consumer complaints about at least one defendant, Absolutaris Base Limited, citing worthless stock signals, a fraudulent trading app, and advertisements claiming unsustainable monthly returns of 20 to 60 percent.
