InfoBytes Blog
Texas securities regulator halts cryptocurrency investment business
On June 5, the Texas State Securities Board (TSSB) issued an emergency cease and desist order against a New York-based cryptocurrency investment business for allegedly violating the state Securities Act by soliciting investments in Texas without obtaining the required state licenses and engaging in fraud connected to the offer of the sale of securities. Among other things, the TSSB alleged that the business’s website advertised false information, including fake photos of its “expert team” and testimonials from purportedly “satisfied clients,” and failed to disclose material facts related to how profits are generated through its purported cryptocurrency mining operation, important security information, and risks associated with cryptocurrency investments. According to the order, the business claimed investors could generate returns between 20 and 75 percent within 24 hours depending on how much is invested in the company’s mining operation. The TSSB also alleged that while the business claimed to possess the appropriate licensure to engage in cryptocurrency mining investments, the business did not have the required registrations or licenses and the investment plans “have not been registered by qualification, notification or coordination at any time material hereto, and no permit has been granted for their sale in Texas at any time material hereto.”