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<h2 id="header-0">The California Department of Financial Protection and Innovation (DFPI) has taken action against 11 cryptocurrency companies accused of breaking California securities regulations.</h2>According to reports, nine of the organisations sought funds from investors in order to trade cryptocurrencies on the customer&#39;s behalf. One of the accused companies claimed to be a &#34;decentralised finance (defi) platform,&#34; while another claimed to be a &#34;metaverse software development scheme.&#34;California&#39;s Department of Financial Protection and Innovation has targeted 11 cryptocurrency firms.The DFPI, California&#39;s financial regulator, has been pursuing crypto asset companies, and the financial watchdog initiated a &#34;crackdown&#34; on almost a dozen digital currency-centric entities on Tuesday. On September 27, the DFPI said that it had &#34;issued cease and desist orders against 11 distinct businesses for violations of California securities laws.&#34; The state&#39;s regulator also stated that the operations are suspected of operating a pyramid or Ponzi scam.According to the DFPI&#39;s press release, the firms are all accused of using investor funds to pay supposed profits to other investors in the manner of a Ponzi scheme. In addition, each of the organisations had a referral programme that functioned similarly to a pyramid scam. The organisations claimed to pay investors commissions if they brought in new investors, as well as extra commissions if the investors they brought in brought in new investors.The DFPI&#39;s action comes after it issued a cease and desist notice to cryptocurrency lender Nexo on Monday. According to the regulator&#39;s complaint, Nexo has been offering and selling unqualified assets in the form of Earn Interest Product accounts from &#34;at least June 2020.&#34; According to the 11 cease and desist orders issued on Tuesday, the organisations reportedly offered classic instances of high return investment products (HYIPs).DFPI commissioner Clothilde Hewlett reacted on the proceedings taken against the crypto businesses accused of Ponzi-like practises at the announcement on Tuesday. Hewlett stated that the DFPI will continue to safeguard California consumers and investors against crypto scams and frauds. These efforts not only safeguard consumers, but also ensure that California remains the leading worldwide destination for responsible crypto asset enterprises to launch and thrive, according to the commissioner.

California Starts Cracking Down on 11 Crypto Companies

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