Texas State Security Board Probes 32 Illicit Cryptocurrency Offerings

An interesting state, Texas always been keen on cryptocurrency offerings and tends it have its own. Now, a recently published report based on four-week investigation founds crypto frauds in which 32 illegal cryptocurrency offerings were revealed.

Texas is high with Crypto Fraud

Texas State Securities Board issued a report that necessarily paint a negative scenery for the crypto industry. On April 10th, a four-week investigation regarding increasing number of illegal cryptocurrency investments by Texans. According to the reports, crypto frauds have been unveiled as “widespread”.

On the note, the Texas Securities enforcement agency on Dec 18, 2017, has revealed 32 investigations based on four weeks. However, in which around 19 firms claimed of using Bitcoin anyways. The exact number of illegal activities related to crypto schemes has been found by TSSB. Remarkably the list comprises few points:

  • Out of these 32 ventures not a single company was a license to sell securities in the state,
  • 11 crypto businesses only had an online presence but no physical address,
  • Five of the listed companies promised unrealistic returns – a clear indication of fraud,
  • Six of them were running Multi-level marketing (MLM) schemes.

The reports disclose that those fraud companies use tokens and coins to refer digital assets. However, tokens are considering as securities under US law and securities that are offered must be registered.

The reports say,

“not a single promoter out of 32 promoters of cryptocurrencies which were investigated was registered to sell securities in Texas”.

In a month of January 2018, the Texas securities Commissioner release a cease and desist order against the Bitconnect’s Ponzi scheme program. Since the infamous UK based ensured investors up to 600 percent earnings in a year by enlisting other investors. Simultaneously, there as no whitepaper and information about its team on the official website.

Moreover, the other example, that when they cut off Bitconnect by serving the cease and desist order to AriseBank. It is the first decentralized cryptocurrency bank.

However, many cryptocurrencies risks like lack regulatory framework globally, hacking security systems, crypto prices fluctuations. Besides, all the risks, currently cryptocurrencies investments are most profitable. Therefore, the company that not advertised was:

“There is no question the evolution of cryptocurrencies provides legitimate businesses with new and exciting means of raising capital and promoting dynamic new technologies. At the same time, however, the Enforcement Division’s investigations revealed that the revolution in digital money is creating an environment ripe for illegal and fraudulent securities offerings”.

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Image Source: Texas State Securities Board

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