Crypto Scams On The Rise: Texas Regulator Issued 16 Cease and Desists in 2018

The Texas State Securities Board has very recently come out with an enforcement report that shows that the regulatory body had had to issue 16 cease and desist orders all through the course of the year 2018, because they were soliciting investors without having any regulatory approval or a license.

Of all these scamming, duplicitous crypto ventures, perhaps the most notorious was BitConnect. Busted eventually by the Texas Emergency Action, this crypto Ponzi scheme had managed to amass a massive market cap of around $2.6 billion. BitConnect then lost about ninety nine per cent of its market share.

Explaining the cease and desist order to BitConnect, the earlier enforcement report from 4th January last year had said:

“The company requires individuals to use Bitcoin, a more established cryptocurrency, to invest in various BitConnect programs. In one investment called the BitConnect Lending Program, investors purchase BitConnect Coins, which are provided to a “BitConnect Trading Bot” to generate returns as high as 40% a month.The Securities Commissioner found that the BitConnect investments are securities, but were not registered as required by the Texas Securities Act and State Securities Board Rules and Regulations. In addition, the company is not registered to sell securities in Texas.”

Clearly, the incidences of crypto scams are on the rise in this region, leading the regulator to take action against 16 crypto initiatives and 60 individuals connected to them. It issued a definitive warning to the general public against trusting crypto schemes like these by saying:

“Promoters of cryptocurrency-related offerings are taking advantage of the anonymity of the internet to attract victims, weaponizing social media to connect with investors in Texas. In 2018, Commissioner Travis J. Iles entered 16 administrative orders against promoters of suspect cryptocurrency investments who were using online advertisements, social media, and other solicitations to attract Texas investors.”

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