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The California Department of Financial Protection and Innovation (DFPI) issued a Desist and Refrain Order on Monday to Trage Technologies Ltd., also known as Trage Tech, for alleged violations of securities laws. The DFPI claims that Trage Tech, which operates out of the Marshall Islands and Panama, promoted “Crypto Arbitrage Investment Packages” without proper registration. Trage purportedly used an algorithmic platform called “Arbtech” to offer high, “risk-free” returns through automated cryptocurrency arbitrage trading.
However, the DFPI’s investigation indicates that Trage Tech operated as a pyramid and Ponzi scheme, with returns paid to investors from new investors’ funds rather than actual profits. Trage’s leadership, including CEO Michael Holloway and Marketing Director Simon Lee, promoted the platform through online presentations and social media, falsely claiming U.S. Securities and Exchange Commission (SEC) registration. The DFPI order bans Trage from further securities sales in California until it meets compliance standards.