Texas Regulator Goes After Two Bitcoin Investment Schemes

The Texas State Securities Board has issued a pair of emergency orders against two separate entities that have reportedly been scamming investors through a bitcoin mining operation and a bitcoin foreign exchange investment fund.

Both startups — Bitcoin Trading & Cloud Mining Ltd. (BTCRUSH) and Forex EA & Bitcoin Investment LLC — are accused of promising unrealistic returns. 

Thus far, the Board has brought actions against nine cryptocurrency-related companies, including the aforementioned. 

From CCN:

Joseph Rotunda, Director of the Enforcement Division at the Texas State Securities Board, told CCN that the latest emergency orders were part of a sweep that the agency launched at year-end 2017 when the bitcoin price was trading in the stratosphere. The sweep targets projects that raise red flags and that are promoting to Texas residents. The number of open investigations into cryptocurrency startups including ICOs has doubled since that time, from about 30 to approximately 60.

“We’ve seen this before when a new market emerges and people want to get rich quick at the expense of others. They infiltrate the market we are trying to weed out those folks. Their schemes are very fragile, like a house of cards waiting to tumble. Something comes along to offers that gust of wind and everything collapses,” Rotunda told CCN.

In Texas, that gust of wind is increasingly taking the form of emergency cease-and-desist orders.

The suspect return promises included a “100% satisfaction guarantee” along with the freedom to change the interest terms at will at BTCRUSH.

Rotunda told CCN:

“They weren’t just putting out a website and letting investors come to them. They weren’t just discussing investments on a message board. Their sales agents were specifically advertising and sending materials to Texas residents. They were communicating, ‘come to our website, register an account, purchase an investment.”

Non-compliance with the cease and desist orders could result in up to a decade in a Texas prison.

- Aaron Goldstein, Gambling911.com