Texas Regulator Halted ICO That Used Fake Celebrity Endorsements

ICO News, News, Regulation | May 18, 2018 By:

The Texas State Securities Board (SSB) has issued an emergency cease-and-desist order against a company that it claims used fake endorsements from celebrities to fraudulently promote its initial coin offering (ICO).

According to the order, crypto firm Wind Wide Coin (WWC) allegedly used images of high profile celebrities like Jennifer Aniston, Prince Charles and former Finland prime minister Matti Vanhanen to deceive investors. The company claimed that these public figures were “satisfied clients of the firm.”

The regulator said WWC is promising investors that income from the investment scheme is “100 percent sure” and that “there is no risk,” adding that clients “can’t lose money.” The firm also allegedly claimed that it is a “licensed company” and “legally registered” to operate in the state.

Joe Rotunda, the Director of the Texas State Securities Board Enforcement Division, said the red flags about this company not being legitimate were the same as others that were found to be fraudulent.

“The company is also accused of fraud and deception by claiming it is a licensed business, that it is a corporation, and that it maintains an address in Houston, Texas,” Rotunda said. “The Enforcement Division’s investigation revealed that Wind Wide Coin is not authorized to transact business in Texas as a corporation and that it is providing investors with a phony address that simply does not exist.”

Rotunda added that the action is a reminder that, step by step and case by case, they’ve been uncovering a virtual playbook of tactics employed by promoters of illegal and fraudulent cryptocurrency investment programs.

“Although their names may change and their products may vary, these promoters are employing surprisingly similar schemes,” Rotunda said. “They are often promising lucrative returns from sophisticated investments tied to cryptocurrencies, and then manipulating photographs, media, testimonials and other online information to deceive the public into believing their claims.”

Earlier this month, the SSB issued emergency cease and desist orders to two crypto investment companies for allegedly scamming investors. One of the orders was aimed at BTCRUSH, a UK-based cloud bitcoin and altcoin mining startup, for allegedly promising an investment return of 4.1% daily interest regardless of the profitability of its mining operations.