TL;DR: New York-based Forex and Bitcoin Trader is the latest focus of the Texas State Securities Board. They’ve issued a formal cease and desist order to the company due to it allegedly not being “registered with the Securities Commissioner as a dealer or agent.” The title of the Board’s online press release employs the phrase “[…] As Crypto Crackdown Continues,” suggesting cryptocurrency-related business are being especially targeted.
Texas State Securities Board: ‘Crypto Crackdown Continues’
“According to the Emergency Cease and Desist Order,” the Texas State Securities Board explained, “New York-based Forex and Bitcoin Trader is advertising on Craigslist Dallas, touting a 900% return in 14 days. The firm deals in cryptocurrency investments, commodity-based derivatives, and foreign currency trading.”
The company is allegedly not registered to conduct such business in the state, though it also allegedly claims to have a license (it’s unclear if the company claimed a state-specific permit). “The company is soliciting Texas investors with the promise that a principal investment of $2,000 will return $20,000 after 14 days, minus commissions and fees equal to 10% of returns,” the Board insisted.
The complaint further alleges Forex and Bitcoin Trader is operating without the necessary insurance to cover against losses, “misleading investors by stating it has an insurance policy that backs client funds and a balance sheet with sufficient net capital to guarantee returns,” which is tantamount to “failing to inform investors of the risks in trading cryptocurrency and foreign currency.”
In late June of this year, the Texas State Securities Board announced a second such sweep, going after cryptocurrency-related companies after apparently being prompted by speculative prices increasing. The Board touts its record, further describing itself as “the first state securities regulator to enter an enforcement order against a cryptocurrency firm and to date the Securities Commissioner has entered 24 administrative orders involving 62 individuals and entities.” It was also sure to highlight the relative volatility of crypto prices, stressing how the “number of suspect cryptocurrency offerings being promoted to Texas investors increase along with the run-up in the price of cryptocurrencies and volatility in the cryptocurrency markets.”
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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