Texas State Securities Board, (TSSB) has joined more than 40 US state and Canadian regulators to investigate fraudulent crypto investment products.
The enforcement action: Operation Cryptosweep
On May 1st, the NASAA (North American Securities Administrators Association) have launched the ‘Operation Cryptosweep’, the enforcement action. However, it includes entire US states and securities agencies in Canada and about 70 investigations and pending 35 enforcement actions.
Remarkably, last year Texas which had started its own crypto offerings investigations now leads in handling, consolidating and coordinating the NASAA sweep.
Since, Dec, 20, 2017, the three enforcement order have already been entered from the start of the sweep by Texas Securities Commissioner, Travis J.Iles. Besides, the State Security Board has taken 10 actions against illegal crypto promoters.
However, Texas was the first country to promote crypto offerings. Thus, NASAA and SSB member agencies will sustain to investigate crypto investment schemes.
Director of the Enforcement Division of the Texas Securities Board and the Vice-Chair of the Enforcement Section for NASAA, Joseph Rotunda said,
“Although the task force’s work is far from complete, my suspicions have already been confirmed. The market for cryptocurrency investments is saturated with widespread fraud, and our work is only revealing the tip of the iceberg”.
Texas State Securities Board issued a four-week investigation regarding increasing number of illegal cryptocurrency investments by Texans. According to the reports, crypto frauds have been unveiled as “widespread”.
On the note, the Texas Securities enforcement agency on Dec 18, 2017, has revealed 32 investigations based on four weeks. However, in which around 19 firms claimed of using Bitcoin anyways. The exact number of illegal activities related to crypto schemes has been found by TSSB.
Additionally, in a month of January 2018, the Texas securities Commissioner release a cease and desist order against the Bitconnect’s Ponzi scheme program. Since, an infamous UK based ensured investors up to 600 percent earnings in a year, enlisting other investors. Simultaneously, there was no whitepaper and information about its team on the official website.
“Many promoters of cryptocurrency investment scams are using strikingly similar tactics. Although they often promise improbably high returns, promoters rarely provide any material information on their investment strategies”.
The State Securities Board have the following tactics that empowered by the firm. Since, to take action while Cryptosweep Operation in May:
“Wind Wide Coin AKA WWC Inc. offered triple-digit returns in a cryptocurrency trading program operated by a “trading bot”. And used the likenesses of actress Jennifer Aniston and Prince Charles in testimonials touting the profitability of the scheme. Bitcoin Trading & Cloud Mining Limited AKA BTCRUSH offered investment.
Bitcoin Trading & Cloud Mining Limited AKA BTCRUSH offered investments in a cloud-based cryptocurrency mining program using phony videos to falsely depict the interior, exterior and workings of its computer server farms.
Forex EA & Bitcoin Investment LLC attempted to capitalize on the intersection of two highly technical markets — cryptocurrency and foreign exchange trading — by promising guaranteed returns without disclosing its strategies and financial backing. The company has represented to investors that a $5,000 investment will return $50,000 in 21 days”.