12 Jan 2018
- Mar-Vic Cagurangan – For Variety
HAGÅTÑA — As it launched an investigation into an alleged scam preying on Bitcoin investors, the Office of the Attorney General of Guam advises local residents to be cautious when making investments in cryptocurrencies.
Attorney General Elizabeth Barrett-Anderson urged investors to “do your research, and consult with experts in the field before making a decision to invest your hard-earned money or retirement in the virtual-currency marketplace.”
The Office of the AG initiated a probe and issued the advisory following a “scam alert” from a local resident who raised concerns about “an apparent bitcoin Ponzi scheme growing on Guam.”
Cyrus Luhr called the attention of the AG’s office to USI-Tech, a Dubai-registered company that is quickly expanding on Guam and claiming to help people invest in Bitcoin.
“But while bitcoin is legitimate, USI-Tech is not,” Luhr said in a mass email containing information about the Texas State Securities Board’s emergency ceases-and-desist order against USI-Tech.
According to the Dec. 20, 2017 order, USI-Tech is “engaging in fraud,” making “materially misleading” statements, is unable to prove a source of revenues, and its “conduct, acts, and practices threaten immediate and irreparable public harm.”
“Canada’s New Brunswick Financial and Consumer Services Commission also issued a fraud alert about USI-Tech on Dec. 21,” Luhr said. “The fraud alert, which also warns of Ponzi schemes, recommends that anyone approached by the company should call the commission’s alert hotline.”
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros — they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency.
Bitcoin, despite its volatile nature, continues to attract more and more consumers and investors on Guam. The first Bitcoin ATM (from which Bitcoin can be withdrawn as actual dollar bills) opened at Brewed Awakening Coffee Shop in Dededo last month. At least 66 local merchants are now accepting Bitcoin as a payment method.
USI-Tech is one of the entities that offers to assist potential Bitcoin buyers.
“USI-Tech isn’t in trouble for engaging in bitcoin. They’re being prosecuted for selling investment packages that are illegal securities, in what appears to be a Ponzi scheme,” Luhr said. “Many local families have recently given tens of thousands of dollars to USI-Tech. Some have cashed out entire retirement savings, others have obtained bank loans or second mortgages. Given the nature of a Ponzi, it’s unlikely they’ll recover their money.”
Meanwhile, the Office of the AG shared the Commodity Futures Trading Commission’s tips on buying virtual currencies:
• If someone tries to sell you an investment in options or futures on virtual currencies, like Bitcoin, verify they are registered with the CFTC. Visit SmartCheck.gov to check registrations or learn more about common investment frauds.
• Remember — much of the virtual currency cash market operates through Internet-based trading platforms that may be unregulated and unsupervised.
• Do not invest in products or strategies you do not understand.
• Be sure you understand the risks and how the product can lose money, as well as the likelihood of loss. Only speculate with money you can afford to lose.
• There is no such thing as a guaranteed investment or trading strategy. If someone tells you there is no risk of losing money, do not invest.
• Investors should conduct extensive research into the legitimacy of virtual currency platforms and digital wallets before providing credit card information, wiring money, or offering sensitive personal information.
• The Security & Exchange Commission has also warned that some token sales or initial coin offerings similarly offered by USI-Tech can be used to improperly entice investors with promises of high returns.
Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/101440-guam-ag-launches-probe-into-bitcoin-scam