Emergency action by the Texas Securities Board is targeting fraudulent cryptocurrency related investments. A number of cryptocurrency firms and exchanges have been issued with cease and desist letters as a result of the firms’ violation of the Texas Securities Act. A Texas Securities Commissioner, Travis J. Less announced that the cryptocurrency networks were allegedly issuing deceptive claims to the public. The sentiments, according to the commissioner, were only meant to trick the public that some of these investors were registered with the securities board. Travis remarked that most crypto related companies were not registered and until registration, would they be allowed to take part in cryptocurrency trade. This is because the very investments sold to the public have neither qualified for registration exemption nor to be sold as securities.
Activities The Board Terms As Violation
Symatri LLC, a crypto-investment company, was reported to have not disclosed sufficient information concerning the value of its Kala cryptocurrency. The company which also takes part in distributing pre-configured computer hardware for mining Kala is said to have not been disclosing relevant information concerning investment risks associated with the mining hardware.
A multi-level marketing company, NUI Social was also issued with the desist order for operating an illegal Ponzi/pyramid scheme. The company allegedly pays commission to members for recruiting individual into Crypto investments.
Mintage Mining LLC was issued with the desist order for selling illegal pre-configured mining hardware similar to Symatri’s case. Other companies in Texas issued with the Cease and Desist letters include Social Membership Network Holdings, NUI Social Affiliates, BC Holdings Investments and Douglass Whetsell.
The Texas Securities Board maintained that the blacklisted companies would not be allowed to act as security dealers or engage in any form of securities exchange in the state until registration.
Texas regulators have been adamant on cryptocurrency legislation since the beginning of 2018. The cease orders began with Bitconnect. It is important to note the closure of Bitconnect that happened soon after the filing. The hunt down which also affected some registered companies like Davorcoin seems to raise the bar for cryptocurrency companies to conform to legislative standards. Davorcoin was reported for failure to reveal its methods of profit generation as well as a specific office of operation.