The Texas State Securities Board (SSB) is moving to counter the emergency of a network of crypto companies that illegally offer investments in the state. The SSB issued an emergency cease and desist order to the companies perceived to be offering unregulated investments in the state.
The crackdown is said to be targeting among others, a mining and token offering company for selling fraudulent crypto-related investments. The emergency action was started by SSB commissioner Travis J. Iles on July 11 in which he suspended several crypto-related companies. The companies were accused of offering fraudulent investments in the state. Some of the companies suspended include BC Holdings and Investments LLC, Social Membership Network Holding LLC, NUI Social, Symatri LLC and Mintage Mining LLC.
Investment Schemes
According to the order, Mintage Mining LLC is accsued for “illegally and fraudulently” issuing and offering two separate investments related to crypto mining. The company, together with Symatri LLC, sell “pre-configured computer hardware to mine Kala.” Symatri claims that the ERC-20 token is “fungible and transferable and will soon roll out for trading on cryptocurrency exchanges.
Additionally, Symatri has claimed that Kala’s ICO has attracted over 13,000 users and has sold more than 814 million tokens. According to the commissioner, the ICO has raised more than $8.5 million and over 800 BTC.
On the other hand, NUI Social alleges to have over 300,000 members in 140 countries. The scheme has been accused of fraudulently collecting commission on all new crypto-related investments. Mccullough and Whetsell were accused of publishing exaggerated and phishing advertisements targeting the residents.
The accusations
According to the order, the companies have been accused of “widespread violations of the Texas Securities Act.” The commissioner noted that all the companies and individuals that alleges to offer investments are not registered to sell securities in the state. Additionally, the investments themselves have not been registered for sale.
Following the order, all the named parties will desist from offering securities in the state until their securities are registered. The named companies have also been warned against engaging in any other security-related fraud in the state.
