Texas has always been an interesting state, even though it tends to do its own thing. Even so, the Lone Star State is keeping a very close eye on cryptocurrency offerings and the risk of fraud associated with this particular business model. Unfortunately, it seems there are a lot of ongoing investigations in this regard, which further confirms that not every project should be trusted.
Cryptocurrency Fraud is on the Rise in Texas
A new report issued by the Texas State Securities Board doesn’t necessarily paint a positive picture for the cryptocurrency industry. More specifically, it appears there are quite a few projects in existence which raise a lot of questions. The report confirms that there has been a sharp increase in the number of cryptocurrency investment opportunities being marketed to Texans.
While that itself is a positive trend, it also shows there are a lot of dubious projects to take into account. So far, 32 investigations into potentially fraudulent schemes have been conducted since December of 2017. That means the securities board has been successful in this venture, although they did not necessarily have to put in much effort to cull the wheat from the chaff.
All of these investigations revolved around fraudulent and illegal advertisements of cryptocurrency-related investment opportunities. Over half of those companies claimed to use Bitcoin, which is not entirely surprising. After all, the main purpose of doing so is letting people invest in their product using Bitcoin, although most of these companies do not even have a working product to begin with. While no promoters of these potential scams were registered to sell securities in Texas, it remains to be seen if they will face jail sentences in light of these developments.
It is also interesting to note that 30 promoters used websites and social media to advertise these potentially fictitious projects, seven of which offered securities linked to completely new cryptocurrencies. By promising returns of up to 40% per month, it is only normal that these projects attracted the attention of the Texas State Securities Board. All of this further confirms that investors need to be very wary of what they are buying into.
Quite a few investment opportunities will not result in major gains in the near future, and anyone claiming differently is probably looking to scam investors. There are no guaranteed profits in the world of cryptocurrency, after all. Moreover, any company offering securities should be registered with the proper authorities, which is clearly not the case in Texas as of right now.