Crypto trading is a booming business, with daily trade volumes remaining steady even in the face of a bearish market. However, not all crypto traders and hodlers are comfortable to do it themselves. Some of those people enlist the help of a broker, similarly to using a stockbroker. Unfortunately, one crypto broker decided to take things one step too far and committed crypto fraud. Timothy Tilton Ayre – the crypto broker in question – sold HempCoin which he misrepresented as “the first minable coin backed by market securities” and scammed his clients out of thousands of dollars. Ayre alleged that one HempCoin was worth 0.10 shares in his company, and he mined then sold just over 81 million of the HempCoins.
First Crypto Disciplinary Action for FINRA
This is the first time FINRA has gotten its boots wet in the crypto industry, as it usually deals with traditional stockbrokers. Due to this, FINRA has been supported by the U.S. Securities and Exchange Commission (SEC) in order to bring the correct level of punishment to the rogue trader.
As cryptos become more mainstream and more crypto brokers begin to surface, this type of crime will only increase. Yet, FINRA and the SEC is America’s all-seeing eye when it comes to the crypto world and its related crimes, so they won’t take matters related to illicit activity lightly.
No Relation to HempCoin
The “potcoin” market is growing at an incredible rate thanks to a number of states in America legalizing cannabis. Companies are using blockchains to help track produce from seed to joint, as well as giving cannabis users their own cryptocurrency to pay for it. One of the major players in the potcoin market is a cryptocurrency called HempCoin – a crypto that shares the same name as Ayre’s fake coin. It’s important to note that the two entities are very different and only share the same name – a possible reason Ayre never tried to register his alleged cryptocurrency.
China Creating Special Blockchain Courts
Amidst the anti-crypto sentiment in China, there is a need for a crypto and blockchain court in order to handle the cases brought forwards. In order to handle these cases, China has created special internet law courts that will handle all cases that are related to blockchain and the online realm. In addition to new internet courts specializing in blockchain cases, China also passed a new law, which means any evidence verified by a blockchain is now legally admissible in its internet courts of law.
The case against the rogue crypto broker is solid and there is little chance he will ever be able to broker crypto trades or operate in the industry again. Unfortunately, for the thousands of investors who bought his fraudulent coin, there is no end in sight. Hopefully, those affected by his scam receive some form of compensation. This is just another event that highlights the importance of doing your own due diligence before investing.