Texas State Securities Board (TSSB) has sent out cease and desist orders after noting that two Bitcoin investment companies, Forex EA & Bitcoin Investment LLC and Bitcoin Trading and Cloud Mining Limited (BTCRUSH), were violating state regulations by selling unregistered securities and “engaging in fraud”.
Securities Commissioner Travis J Iles wrote that the former was not only promising unrealistically high returns for investors but also stating that cryptocurrencies were completely free from risk. The company wasn’t registered or granted a license to work in the state. The latter was claiming that it could provide 4.1% interest to investors everyday. Instead of using real videos, BTCRUSH used “stock footage” to show users how the mining farms worked and sold securities without registering them with the state.
Both these companies are also accused of hiding information regarding the background of the business and the qualifications of the founders. Most importantly, they failed to inform users that there were many risks involved in these schemes such as the volatile nature of cryptocurrencies.
Under the Texas Securities Act Section 23-2, “an offer containing a statement that is materially misleading or is otherwise likely to deceive the public” can lead to immediate cease and desist orders.
Cointelegraph spoke to Joseph Rotunda, director of the TSSB’s Enforcement Division, regarding the return on investments ‘guaranteed’ by fraudulent companies.
Investors should remember that guarantees of excessive or unrealistic returns ring hollow unless promoters support their claims with material, relevant information.
While not much information is available on the internet regarding Forex EA & Bitcoin Investment, BTCRUSH is still promoting higher returns on the website. The company states that it is privately registered in the UK with three farms including Maverik, Hephaestus and RebelPower. CEO Bruce Rodgerson explains that he started mining Bitcoins in 2010 and his goal is to use his expertise “to improve mining technologies”.
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