California targets crypto platform over $1M Ponzi scheme

The California Department of Financial Protection and Innovation (DFPI) has issued a Desist and Refrain Order against Trage Technologies Ltd., also known as Trage Tech, for alleged securities violations.  

Trage Tech, operating from the Marshall Islands and Panama, is accused of promoting unregistered “Crypto Arbitrage Investment Packages” that promised “risk-free” returns through its algorithmic platform, Arbtech.  

According to DFPI’s investigation, Trage Tech’s operations resemble a pyramid and Ponzi scheme, where returns to earlier investors are paid using funds from new investors rather than actual profits.  

The platform’s leadership, CEO Michael Holloway and Marketing Director Simon Lee, allegedly promoted these investment packages through online presentations and social media, further claiming U.S. Securities and Exchange Commission (SEC) registration—a claim the DFPI found to be false.  

The DFPI’s order prohibits Trage Tech from further selling securities in California until it meets regulatory standards.  

The DFPI claims this action seeks to protect investors from “fraudulent schemes that misuse their funds” while warning the public about the risks involved with unregistered cryptocurrency platforms.