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Despite how people portray it, the cryptocurrency market is far from perfect. There are still a vast variety of scams that exist along with projects that do not have the best intentions in mind for consumers. Forbes reported that on Tuesday, the Texas State Securities Board issued statements which called for two cryptocurrency firms to cease their operations on Texan soil.
Texas State Securities Board And BTCRUSH Square Off
On Tuesday, the Texas State Securities Board called for BTCRUSH, a self-described cryptocurrency mining firm, to cease their business operations within the state. The Securities Board found that the services which BTCRUSH were promoting were not allowed to be sold in Texas without proper licensing. Even if the company had obtained the required licensing, the agency determined that the company’s operations were fraudulent.
Texas Securities Commissioner Travis Iles found that the information and the videos shown on the BTCRUSH website claiming to depict their mining operations were fake. The website claims that one of their mining farms is located in a “bunker of second world war times” and displays video footage purporting to be of the actual farm. The videos and subsequent statements given were a red flag for the securities commissioner who decided to further investigate the legitimacy of the videos. Once further analysis of the videos was completed, it was found that the videos were online stock footage, altered to fit the BTCRUSH narrative and its goals.
The Texas State Securities Board also brought into question the unusually high 4.1% daily returns which BTCRUSH promises.
A 4.1% daily return would take an initial investment of $10,000 and generate a profit of nearly $150,000 over the course of just one year. This staggering 1500% return would dwarf any return a traditional investment which retail investors could make.
To give this number a bit of context, the S&P 500, one of the most prominent indexes on the stock market, has had an average yearly gain of 9.7% over the past 90 years. If BTCRUSH did deliver on what they claimed, they would have beat out the S&P by over 150 times.
If this investment opportunity sounds like it is too good to be true, that is because it is. Despite a lack of information and sentiment about the site online, it has become clear that the operation has no legitimacy and comes without the promise of a “100% satisfaction guarantee.”
Although more conservative investors would be quick to call this operation out, there is every likelihood that some investors have sadly already gotten themselves caught up in the scams perpetrated by these malicious companies, losing vast amounts of funds in the process.
BTCRUSH was not the only ‘company’ to be called out by the Securities Board. Forex EA & Bitcoin Investment also received a cease and desist order on Tuesday. Regulators determined that they were operating without the licensing required to operate and sell securities and the services they provided in Texas.
It seems that unwarranted claims have become common with the cryptocurrency scam crowd. Like BTCRUSH, Forex EA & Bitcoin Investment promises impossible returns, claiming to make investors 10 times their original investment in 21 short days.
The Texas State Securities Board: Bitcoin Police?
Since the cryptocurrency bull market of 2017, it seems like Texas has become a mainstay in the fight to combat crypto scams. Earlier this year, the same Texas State Securities Board issued a cease and desist order to BitConnect, by far the most infamous cryptocurrency con. Just 2 weeks after the C&D was issued, BitConnect announced that they would shut down its lending operation, while still making off with millions of dollars worth of Bitcoin.
The native BitConnect (Ticker: BCC) cryptocurrency was worth over $2.9 billion dollars at its peak. Looking back, it was quite irrational to price what many thought was clearly a scam at such a value. BitConnect was the highest profile cryptocurrency scam the Texas Securities Board has taken on, but the two orders made against Forex EA and BTCRUSH have raised the number of crypto companies brought under fire by the agency, to a total of 9.
These cases alone, from Bitconnect to BTCRUSH, have shown how this regulatory board is determined to weed out the bad actors in the cryptocurrency and blockchain space. But will they succeed? It seems that only time will tell.
The Texas State Securities Board has been making moves to bring to light the sketchy cryptocurrency operations running across the world. Do you think other regulatory boards/entities out there should do the same? If so, which ones and how? Please let us know in the comments.
Images Courtesy of Wikimedia Commons, Texas State Securities Board, AdobeStock