Deceptive and misleading advertisements targeting Texans – including those which falsely assured them that investing in Bitcoin was risk-free – were among the offenses cited by the Texas State Securities Board in its emergency cease and desist order against a Bitcoin investment company. The company, Forex EA & Bitcoin Investment LLC, was also accused of failing to disclose the identity of the principals behind it as well as concealing some pertinent facts regarding the buying and selling of digital currencies.
Unregistered Sale Of Securities
The company, along with its representatives, James Butcher and Richard Dunn, were accused of claiming that an investment in their company’s Bitcoin Trading Program involved no risks and that the returns were 100% assured with no possible way they could lose money. The company also allegedly told investors that there was an account with a balance of $500,000, and that any money lost would be refunded from that account, further strengthening the case for ‘risk-free’. All this was promised to only take 21 days, with the promise that invested funds would be refunded if no profit was realized within that period.
The order further alleges that the respondents were offering securities for sale at a time when the securities were not registered with the Securities Commissioner, a violation of Section 7 of the Securities Act. In addition, they were violating Section 12 by offering securities without being registered.
Respondent Forex EA & Bitcoin is violating Section 12 of the Securities Act by offering securities for sale in Texas without being registered pursuant to the provisions of Section 12 of the Securities Act. Respondent Butcher and Respondent Dunn are violating Section 12 of the Securities Act by offering securities for sale in Texas as agents of Respondent Forex EA and Bitcoin without being registered as agents of Respondent Forex EA and Bitcoin pursuant to the provisions of section 12 of the Securities Act.
Lack Of Transparency
The board also alleged that the team had effectively denied their investors a deeper look into their financial state. No information had been forthcoming about the account that was to guarantee the investment and cushion against losses. Its financial position, including the state of the assets and their liquidity, had also been kept from the investors. Furthermore, the company had not disclosed any other financial position which may have had a bearing on its ability to meet its promises.
The company has been ordered to cease and desist from offering any securities effective May 8 until the security is registered with the Securities Commissioner.
It is further ORDERED that Respondents immediately CEASE AND DESIST from offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public.