Texas regulators have brought charges against 15 illicit investment platforms advertising fake investments in cryptocurrencies, currencies, and binary options, according to the Texas State Securities Board (TSSB) launch shared with CCN. A total of three cease and desist orders were issued against separate entities. Security Commissioner Travis J. Iles announced a series of enforcement actions as part of the proceedings against scammers.
One scammer, ten companies
In the TSSB’s first emergency cease and desist order, ten Internet investment platforms were linked to one individual, a James Blundell, who allegedly drew up the scheme to promote fraudulent investments. He called his companies attractive names, such as “Trusted Miners,” “BitcoinFX Options,” “Safe Trading Profits,” and “CryptoTradeFXWay,” which promise significant returns on capital within hours. Blundell, a Texas resident, was also accused of using numerous social media accounts to spread the scams, including three Instagram accounts, seven Facebook profiles, and one Linkedin profile. The defendant capitalized on his social media presence to position himself as a thought leader. and a successful trader in the cryptocurrency markets, as well as his binary options and currency trading operations. He was even found to be advertising an official “business license” issued by the City of Texas to cement his claims. However, the TSSB confirmed that these licenses were a forgery. Blundell was also found to be presenting potential investors with an image of a forged Texas driver’s license, according to the warrant.
Currency, crypto and fake trading certificates
In a second separate legal order, three platforms – Binary Trade Forex, FX Trades and IQTrade – were named by the TSSB under false claims of operating from Valentine, Texas. They were allegedly recruiting investors by illegally promoting investments in the currency, binary options, and cryptocurrency sectors for lucrative rates of return. The order alleges that they fraudulently claim that these investments are guaranteed and that the use of false testimonials adds credibility to their schemes. Furthermore, they also falsely claimed that the Isle of Man Gambling Supervision Company regulated them as “electronic games” companies in the British Isles. However, authorities found that they were not licensed to sell securities in Texas and have not been registered in any way with the agency. The third order called “GenuisPlanFxPro,” a cryptocurrency, binary option, and forex investment platform that falsely claimed to operate from Austin, Texas. The malicious exchange was found to attempt to add additional legitimacy to its scheme by falsely claiming that it was regulated by the Cyprus Financial Conduct Authority and the Securities and Exchange Commission, the TSSB said.
“The money is gone”
In a statement, Commissioner Iles said the series of actions clearly demonstrated the risk of dealing with trendy online investment platforms.
“INVESTORS … NEED TO INVESTIGATE THOROUGHLY BEFORE INVESTING, BECAUSE, ON THE INTERNET, ANYONE CAN FAKE A COMMERCIAL LICENSE, PUBLISH FALSE TESTIMONIES OR FALSE STATEMENT THAT IT IS REGULATED BY AN FOREIGN AGENCY.”
All three cases also highlighted the growing use of social media (and the manipulation of information through the medium) to spread investment scams that trap millions of gullible investors every year. “Bad actors know how to use social media and Internet websites to create the pretense of operations. They can also use this technology to quickly reach large numbers of potential victims, ”said Chief Compliance Officer Joe Rotunda. But once trust is gained, they disappear. “In many cases, the money is gone,” added Rotunda. The TSSB has led a crackdown on illegal cryptocurrency operators since December 2017. Since then, the agency has carried out 37 enforcement actions against more than 100 respondents for illegally and fraudulently operating in cryptocurrency investments.