Texas Regulator Issues Cease And Desists Orders To Two Crypto Investment Firmsbr>
The Texas State Securities Board (SSB) has issued emergency cease and desist orders to two crypto investment companies for allegedly scamming investors.
The first company to receive an emergency cease and desist order from the SSB is Bitcoin Trading & Cloud Mining Ltd. (BTCRUSH), a UK-based cloud bitcoin and altcoin mining startup. Also included in the order are the company’s sole director and shareholder Jaylon Cross, founder and CEO Bruce Rodgerson, CMO Robin Lozinski, and sales agent Thomas A. Johnson.
The SSB has alleged that BTCRUSH’s website contains a video that falsely depicts three mining farms, Maevrick, Hephaestus, and RebelPower.
“Although the BTCRUSH Website represents these videos depict the Maverick Farm, the Hephaestus Farm, and the RebelPower Farm, they do not actually depict mining farms operated by Respondent BTCRUSH,” the SSB. “Instead, Respondent BTCRUSH created these videos by manipulating stock footage available for sale on the Internet.”
According to the cease and desist order, BTCRUSH promises an investment return of 4.1% daily interest regardless of the profitability of its mining operations, adding that its main principle is a “100% satisfaction guarantee for its customers.”
The order also stated that BTCRUSH, which is not registered as a dealer with the Securities Commissioner, is recruiting investors to act as sales agents without verifying whether the sales agents are registered to sell securities in Texas or in any other jurisdiction. It further alleges that the company and its management are “intentionally failing” to disclose sufficient information for investors, including their assets, liabilities, and capitalization.
The second company is Forex EA and Bitcoin Investment LLC (My Forex EA), which authorities said has been offering unregistered securities, while also making deceiving statements that mislead gullible investors. The company allegedly used a Houston area code attached to their phone number even though the company isn’t physically located in the region, which would deceive unsuspecting residents.
The company were represented by James Butcher and Richard Dunn, who the SSB said were involved in fraud in connection with Forex investment offers as well as using materially misleading and deceptive practices.
Texas Securities Commissioner Travis Iles said that My Forex EA is promising investors that a $5,000 investment will return a guaranteed $50,000 in 21 days, while intentionally failing to disclose its trading strategy and the widespread risk in trading bitcoin and foreign currencies.
My Forex EA has been ordered to cease and desist from offering any securities effective May 8 until the security is registered with the securities commissioner.