TSSB accuses LeadInvest of engaging in fraud and deceiving investors that they will get profits from mining and lending operations. LeadInvest made up names of its management team and advisors by lifting images of actual people from other websites.
The Securities Commissioner of the State of Texas (TSSB) is claiming that LeadInvest is into the illegal business of soliciting investors for a lending program and cryptocurrency mining. The commission also says that the startup has fabricated its management team.
The commission issued a cease order this week for violating section 7 and 12 of the Securities Act. This is because the assets dealt with the LeadInvest Fiat Currency Lending Program falls under the “securities” descriptions of the act. The company offers mining and fiat currency lending program.
TSSB says the company conducts the “immediate and irreparable public harm”. The commission said that users had created 190,000 accounts with the company and it has $177 million in its coffers. Investigations revealed that the company fabricated McAllison Law Firm by using images of members from an existing California-based law firm.
While the startup shows many advisors from different fields, TSSB says all those are fabrications. Its website also had an image of Supreme Court Justice Ruth Bader Ginsburg together with other solicitor generals and former solicitor. The company claimed this was their “CodeofEthics Association”. The startup lifted images of other actual people from other websites, uploaded them on its website and then changed their names. Thus, it engaged in impersonation crime.
Moreover, the startup website redirects to https://www.bitcoinvest.de.
Dealing with securities
The authority said it expected the firm to comply with the Texas Securities Act since it reaches out to investors in Texas. The startup told investors that they would abide by the relevant authorities in the Cayman Islands. However, the commission says this statement is “materially misleading or otherwise likely to deceive the public.”
It is not the first crypto company with such operations in the state to get cease and desist orders. Others include BitConnect and AriseBank.