Recent charges laid against a former executive in the world of crypto-mining provide a chilling wake-up call to the sector. The erstwhile CEO of the essentially counterfeit crypto mining business, IcomTech, Marco Ruiz Ochoa, confessed to a count of conspiracy to commit wire fraud on September 27 at the Southern District Court of New York. It’s a stark reminder that all is not always as it seems in the cryptoworld and underlines the importance of robust regulation.
For those unfamiliar with the case, Ochoa led IcomTech from its inception in 2018 up to 2019. During this period, promises of daily returns lured investors to the company, thinking they were getting involved in a crypto mining and trading entity. Lavish expo hosting and community events were strategies used to attract customers worldwide. The company even created its own token – Icom.
However, it seems that the company was a façade as no crypto mining was carried out. Investors found they were unable to take out the profits showing on their account balances. By the end of 2019, the company had collapsed.
Ochoa is not the only person in the cryptoworld to face charges of this nature. The Commodity Futures Trading Commission (CFTC) has announced charges against Mosaic Exchange Limited and its CEO, indicating a problem of fraudulent activity in the sector. These examples highlight the necessity of solid regulations to guide and protect participants in the cryptoworld.
Yet, it’s worth remembering that with the evolution of any industry, there will always be those who exploit the system for personal gain. A testament to the fact that as far-sighted and innovative the crypto sector is, it is not immune to the age-old issues of trust, credibility, and accountability.
While it may seem as if this paints a gloomy picture for the future of the blockchain, it’s worth considering, that every setback serves to highlight areas of needed growth and dialogue about appropriate checks and balances. New regulation is instrumental in plugging holes, identifying gaps in existing systems, and proving a framework for fair play. The hope is, with time, the rules will become more refined, providing a safety net that engenders trust among all parties involved, whilst continuing to nurture innovation. A delicate, but not insurmountable balancing act.
A message is certainly being sent to those attempting to exploit the cryptoworld, as underscored by U.S. Attorney Damian Williams: “Today’s guilty plea sends a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud”. Placing focus on stringent and efficient regulations can help the sector look forward to a robust future. A future that ideally balances growth and safety whilst serving as a deterrent for further fraudulent activities.
Despite the dark cloud these allegations cast, many remain optimistic about the crypto future. After all, every dark cloud carries a silver lining.
Source: Cointelegraph
