Cryptocurrency enthusiasts had found themselves in an exciting place last year, with Bitcoin, Ethereum, and other virtual currencies rising to unprecedented all-time highs. It wouldn’t be long until that excitement found its way into the mainstream, and those who had previously ignored or doubted the validity of blockchain technologies found themselves wanting to get in on the gold rush.

It would be the interest of new investors that contributed to the soaring price of cryptocurrencies like Bitcoin and other alt-coins, and some saw this as an opportunity to cash in on naive investors hoping to strike it rich. It wasn’t long before the cryptocurrency space began seeing a surge of initial coin offerings (ICOs). While some of these ICO projects would develop into legitimate technologies, others were simply high-tech spins on pyramid or Ponzi schemes.

Bright-eyed new investors were undoubtedly eager to cash in on what had the potential to be the next Bitcoin. Those same investors watched as excitement over the crypto space waned and projects they believed would one day make them millions of dollars left them penniless. It would be these very scams that would catch the attention of the SEC in the US.

Though cryptocurrencies historically have been, and remain, a mostly unregulated market, officials from countries around the world have been discussing how to go about regulating and reeling in companies offering digital currencies in order to help protect consumers. Generally speaking, the SEC has remained relatively neutral on the subject, but in recent months they have expressed concern over companies fundraising through ICOs and websites that advertise themselves as exchanges.

The first signs of this crackdown came when the Texas Securities Board and North Carolina Securities Division sent the blockchain lending platform and notorious pyramid scheme Bitconnect cease and desist orders. A class action suit against popular YouTubers who regularly promoted the scam, including Ryan Hildrith, Trevon James, Craig Grant, and a John Doe known online as CryptoNick, would be filed shortly thereafter. Bitconnect would be the first, but the SEC is now showing that it certainly will not be the last scam in the crypto space that they are prepared to pursue to the fullest extent of the law.

According to a report recently published in the New York Times, federal agents have placed two founders of the Centra exchange under arrest after raising $32m from investors and receiving endorsements from celebrities like boxer Floyd Mayweather and singer DJ Khaled.

On the surface, the ICO for Centra sounded promising. Centra claimed they were developing an exchange which would allow users the ability to access a blockchain-based debit card that the investor could then use at any business that accepts Visa or Mastercard. If the exchange was a success, it would offer cryptocurrency users and those who do not have access to a traditional bank account the ability to conduct transactions anywhere in the world, something the cryptocurrency community has been working towards for quite some time.

While Centra definitely caught the attention of those looking to find a real-world use for digital currency, according to the SEC’s complaint Centra is a fraud. The SEC claims that Centra purposely misled consumers and did not receive permission from either Visa or Mastercard to utilize their payment processing networks. The SEC also found numerous instances of fictitious entities being listed as part of the company’s development team.

“We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, said in an official statement. “As the complaint alleges, these and other claims were simply false.”

Centra was just one of the dozens of subpoenas the SEC has sent out in regards to fraudulent or misleading ICO projects the New York Times reports, however, the arrest of Centra’s Sam Sharma and Robert Farkas marks the first arrests we’ve seen in the SEC’s recent commitment to preventing fraud in the cryptocurrency space. Both men are currently facing serious charges including conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud