The Texas securities watchdog has issued a cease and desist order against two alleged digital currency scams. In its order, the regulator claimed that the two have been directing investors to deposit principal for fraudulent algorithmic digital currency trading.
The Texas State Securities Board issued the cease and desist order against London-based Bitles Limited and its principal Janis Lacis and Princeton, Texas-based C3 Data Services, and its principal Edward Carter.
Bitles has been luring investment into eight different “saving plans,” authorities said. It claims to use proprietary algorithmic trading software as Cryp-Spider AI Algo-Trading System. This system reportedly trades digital currencies across different exchanges, generating 0.3 percent – 6 percent in daily returns.
Additionally, as with most scams in recent months, Bitles also has a native token, the BTL token. According to the TSSB, the firm claims these tokens are utility tokens that will shoot up in value by as much as 60 percent per month. They assure the BTL holders that they will generate at least 30 percent per month from the tokens.
Bitles is reportedly recruiting sales agents to recruit Texas investors. This recruitment reportedly requires the sales agents to attend a seven-day training program. After concluding this program, the agents purportedly expect to receive at least $10,000 per month through commissions, bonuses, and awards, including a villa in Dubai and a luxury yacht.
However, according to the regulator, the offering is a fraud. Both companies are accused of concealing critical information from their investors. This includes information about key personnel, information relating to the trading software and business operations.
Furthermore, the two companies are not authorized to operate or employ sales agents in Texas.
Director of compliance for the regulator, Joe Rotunda, said:
“The price and market capitalization of cryptocurrencies has sharply increased over the previous year. Unfortunately, promoters of illegal crypto-get-rich-quick schemes are taking advantage of these changes to the market – leveraging widespread interest to peddle fraudulent products. Texans interested in purchasing securities tied to cryptocurrencies should be aware of considerable risks and deal only with issuers lawfully operating in Texas.”
The Texas regulator has intervened to stop digital currency scams on many occasions in the past. Delta Crypt, AntPoolTop Mining, a so-called Bitcoin Pope, Mirror Trading International, a South African mega-scam, among others.