The Bitcoin community has already shown that it isn’t as gullible when it comes to scams, but a momentary lapse of reason can cause anyone to slip. As more information about crypto fraud is disseminated, it becomes harder for criminals to get away with their fraudulent activity and regulators are also doing their part to clean up the space. Texas regulators have begun a dedicated push to protect Texans from crypto scams and a plan that offered 900% returns quickly caught their eye.
According to a statement from Texas Securities Commissioner Travis J. Iles, Forex and Bitcoin Trader (FBT), a company out of New York that promised 800% returns, has been busted by the Enforcement Division of the State Securities Board (SSB) in Texas. The fraudulent company looked to attract unsuspecting clients willing to put up $2,000 in digital or foreign currency or commodity-based derivatives with assertions that the return on such an investment would be $20,000 – minus the company’s fees.
It also asserted that it had a license to operate as a broker-dealer and was covered by both fiat holdings to guarantee returns and an insurance policy as added protection. However, all of it was a farce, and Texas regulators determined that nothing the company stated was accurate. Given the fact that the company was using Craigslist to advertise its platform should have been the first clue.
As a result of the investigation, the SSB has issued an “Emergency Cease and Desist Order” against the company. The order requires the company to cease “offering for sale any security in Texas until the security is registered with the Securities Commissioner or is offered for sales pursuant to an exemption from the registration under the Texas Securities Act.” It also prevents the company “from acting as a securities dealer or agent in Texas” until it is registered with the Securities Commissioner or receives an exemption.
It isn’t likely that either of those two scenarios will have a positive outcome for the company and there was no mention of whether or not any criminal case against FBT is being pursued. That, however, is highly likely given the attention regulators are placing on the crypto space.
The SSB has now issued four emergency actions against crypto-related companies since the Enforcement Division began its second sweep this past June. It issued three on June 28 as the sweep got underway and had previously issued ten injunctions in the first sweep. To date, the SSB has targeted a total of 61 entities in 22 different cases tied to crypto investments.
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