The Texas State Securities Board has issued a cease and desist order against a digital currency investment scam that promises to double one’s investment. The scam is allegedly operated by Nickolas Steele, a man who describes himself as a digital currency guru and lures investors through Craigslist and Facebook.
In its press release, the regulator noted that Steele isn’t registered to sell securities in the state. This hasn’t stopped him from soliciting money from investors. Steele allegedly places ads on Craigslist, soliciting investments of between $5,000 and $50,000. He promises investors that he can double their money, paying out the interest over a period of 12 months.
Steele is the operator of a Facebook group known as TheCryptoFacts. This has been his reference point, according to the regulator, using it on his ads as proof that he has been in the business for long and knows all its ins and outs. On this group, he claims that he made a killing in February and March 2020, adding that he is using this money to fund COVID-19 relief programs.
The watchdog’s Enforcement Division has previously issued a warning to Steele about his activities, telling him he was violating the Texas Securities Act. In response, Steele changed his title to consultant, putting him beyond the reach of the regulator. Despite the name change, he still continues to tell the investors that he will trade on their behalf.
The warning by the regulator also made Steele change his ‘guaranteed profits’ rhetoric and started warning investors that he may lose money due to the risks associated with digital currency trading.
Despite claiming that he would trade digital currencies with the investors’ money, the regulator found that he had been channeling some of the money into other uses. He has allegedly been using some of the investors’ money to pay for online dating services, restaurants, ride sharing services and other such uses. He has also allegedly been withdrawing some of the funds from ATMs.
Texas has been one of the states where digital currencies have been quite popular. This popularity has seen a high number of digital currency scams targeting Texans. The state regulator has been equal to the task, halting quite a number of them and issuing warnings against many more.
The regulator started cracking down on these scams more than three years ago, issuing a cease and desist order against My Crypto Mine, a scam that sold worthless tokens. It has also smoked out FxBitGlobe, a scam that promised 75% returns and Forex and Bitcoin Trader, yet another scam promising 800% returns.
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