The SEC accused NovaTech of defrauding the company of $650 million⚖️

The U.S. Securities and Exchange Commission (SEC) accused the founders and promoters of NovaTech of organizing a pyramid scheme that raised more than $650 million in crypto-assets.

🛡Investors were guaranteed "investment security, returns from day one, and access to capital." However, in reality, most of the funds were used to pay existing investors, promoters, and for Petyonov's personal use.

"MLM schemes of this scale require promoter activity to sustain. Our actions show that we will hold accountable not only the organizers, but also the promoters who spread scam by illegally soliciting victims," SEC Office Director Eric Werner.

📍The commission has charged the defendants with violating anti-fraud regulations and registration requirements. The regulator is seeking permanent injunctive relief, civil penalties and refunds.

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Founder of ezBtc used user funds to play casino games💸

Canadian crypto platform ezBtc and its founder David Smiley embezzled about 13 million CAD (~$9.5 million) of customer funds, using part of it for gambling. This was reported by the British Columbia Securities Commission (BCSC).

📤The company, which folded in September 2019 and was liquidated in 2022, claimed to have kept all users' investments in cold storage. However, the BCSC found misappropriation of assets "for personal purposes."

💰According to the investigation, ezBtc accumulated approximately 2,300 BTC and 600 ETH between 2016 and 2019. According to the regulator, Smiley diverted nearly a third of users' funds for gambling and personal use:

"A total of 935.46 BTC and 159 ETH were transferred from ezBtc to the exchange accounts of Smiley and [gambling platforms] CloudBet and FortuneJack. Transactions to the two gambling sites were sometimes made directly from ezBtc and sometimes indirectly from ezBtc through Smiley's account and then to the gambling sites".

📍Sanctions against participants in the scheme will be imposed by September 24. They may include financial restrictions or a ban on market activity. Representatives of Smiley and ezBtc were not personally present at the hearing, but the founder of the company was represented by a lawyer.

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💵 Is diversification useless?

Friends, today I thought about the fact that not everyone may understand what diversification is or why it is needed, so let's refresh our knowledge.

🔤 Diversification is a special strategy of investment portfolio management, which reduces risks and allows you to get profit at any situation on the market.

Many people think that diversification ends with the fact that you simply shouldn't keep all your money in one place, but this is far from true.

1️⃣ This approach implies not only the distribution between places to store funds, but also their actual allocation.

For example, don't keep all your capital in one market, be it stock or cryptocurrency. Or allocate funds between sectors so that if one fails, the profits from the others will cover all losses, etc.

2️⃣ In addition, using the example of the past week, we have seen that it is always profitable to keep some funds in fiat or stable coins.

Are you diversifying your portfolio or sticking to another strategy?

🔥 — Diversification is a must
🤔 — I have a different strategy. I take risks.

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