According to US regulators, the three South African crypto firms sanctioned have been targeting citizens of the states in an alleged scam activity.
The United States of America crypto regulation authority said these crypto firms sanctioned were already asked to refrain from providing services to the public.
According to the authorities, the firms claim to provide debit card services pegged to stablecoins with investors guaranteed with nothing less than 500% return after two years.
The three firms have been running their alleged scam operations in Austin, Texas, with the aid of an advertisement on local radio stations in the state.
Authorities say crypto firms sanctioned were offering debit card services
The authorities said it has already made moves against the crypto firms sanctioned as it has issued a cease and desist order against the firms.
Not only are the firms making use of radio to run their ads, but they also use various social media platforms, including Facebook and the like, to run multiple ads around the Austin area.
According to Lance Angus Jerrard, the three firms have been claiming to offer a liquidity card which the firms said was developed by payments giants, MasterCard.
Crypto scams around the world have increased since the beginning of the pandemic
Coming hand in hand with the surge of the coronavirus pandemic cases is the rise in crime rate, which can be a result of the effects of the pandemic. Crypto-related scams have been on the rise since the pandemic started around the early part of March.
The Federal Bureau of Investigation (FBI) warned in early this year that something of this magnitude might eventually happen. Major countries have now recorded a rise in crime rate, with most of it coming via crypto-related scams.
Scammers have perfected unique ways to trick their victims into giving up their digital assets via scams, including a fake crypto giveaway, Bitcoin doubling, and some other means. With the three South African crypto firms sanctioned, authorities would have to continue working hard to catch other illegal crypto outfits.