Home News After Prices Rise, Texas Regulator Conducts Second Sweep of Crypto Schemes

After Prices Rise, Texas Regulator Conducts Second Sweep of Crypto Schemes

TL;DR: Price action isn’t always a positive, as it also attracts attention from law enforcement. The Texas State Securities Board recently “entered three emergency cease and desist orders against promoters of fraudulent cryptocurrency-related investments,” following the markets near three month climb, the regulator acknowledged.    

Texas Regulator Conducts Second Sweep of Crypto Schemes

“The orders stem from an initiative by the Enforcement Division of the State Securities Board,” an announcement explained, “which last week started an investigative sweep of suspect cryptocurrency offerings after the price of bitcoin more than doubled in the past three months.” It’s an off-hand statement, and probably doesn’t mean to give off a conspiratorial tone, but there is a lot of truth to it.

Cryptocurrency prices rising makes everyone look like a genius. Scams are attracted to the inexplicable nature of flash upticks and downturns, and often catch waves right at the most vulnerable crest. Newer investors especially are confused by talk of this or that reasoning, ideological puffery, the notoriously cultish behavior of the space, and become easy marks. And where there are scams, regulators are soon to follow.


The latest round of enforcement sweeps come from Texas, as investigators discovered several investment offers through Facebook ‘work from home’ forums. Back in late 2017, the agency began its initial sweep, “also in response to a sharp increase in the price of bitcoin and other cryptocurrencies.” That time netted almost a dozen injunctions, which eventually led to “emergency action against 61 parties in 22 administrative cases involving investments tied to cryptocurrencies,” the regulator claims.

The current crop involves Facebook advertisements: potential investors are lured to WhatsApp, “promising investors they can earn lucrative profits for them by trading bitcoin and other cryptocurrencies and foreign currencies,” the injunction explains. The schemes’ proponents appear to be located in Belize and India, and involve three individuals and one company, Tint X Mining. None of the participants are licensed or registered to sell securities, and yet marketed the company as “telling investors they can earn $213,300 over three months on an initial investment of $5,100 in the company’s bitcoin mining operation,” the regulator insisted.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH. 

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