Walton, NY asked in Securities Law and Stockbroker Fraud for New York

Q: Financial investment question

I currently have access to a crypto investment fund through an individual who trades to make a group of us money, and I want to open it up to friends and have them go through me in order to invest. I pay $200/mo to have access to the fund, so I would charge them $100/mo and have them go through me. Are there any legal risks with this?

2 Lawyer Answers
Chris Warren
Chris Warren
  • Securities Law Lawyer
  • New York, NY
  • Licensed in New York

A: This response does not constitute legal advice.

Yes. If you take your friends' money for access to an "investment fund" an "individual" (read: not a broker) runs, you could be violating several securities laws as well as potential "blue sky" State laws. Further, based upon the limited facts you've provided, it also sounds like the "individual" who is "trading" on your behalf is violating several securities laws because they are likely an unregistered broker.

Your continued participation through the unregistered individual, alone, will likely not present a legal risk to you. However, in my experience, it sounds like you may taking an unnecessary financial risk; there are no such things (yet) as a "crypto investment fund."

Bruce Alexander Minnick agrees with this answer

1 user found this answer helpful

Bruce Alexander Minnick
Bruce Alexander Minnick
  • Stockbroker & Investment Fraud Lawyer
  • Tallahassee, FL

A: Your present plan as stated by you above is unlawful in several different ways. all of which can (possibly) be remedied if you can find and hire a very experienced Florida lawyer who has banking and securities regulatory experience.

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