Two Crypto Investment Firms Get Hit with Emergency “Cease and Desist” Orders from Texas
Even with so many legitimate cryptocurrency platforms in the industry today, two investment firms and related parties have received an emergency “cease and desist” order for their schemes. The orders come from the Texas State Securities Board, after videos of three different mining farms were exposed to be stock images, which is cited in the order.
Both companies involved are charged with violating multiple laws, including multiple misleading claims that were used to con investors.
Bitcoin Trading & Cloud Mining Limited
The main company included in this order is Bitcoin Trading & Cloud Mining Limited, which is based out of London and is more commonly known as Btcrush. Four of the most prominent members of the company are included in the order as well, which are Jaylon Cross (sole director and shareholder), Bruce Rodgerson (founder and CEO), Robin Lozinski (Chief Marketing Officer), and Thomas A. Johnson (a sales agent).
One of the big problems that comes out in the claims of a 100% satisfaction guarantee for customers. Btcrush claims to be “a cloud-based cryptocurrency mining company that mines bitcoin and altcoins and profits from selling altcoins for bitcoins.”
However, every consumer is promised to get a 4.1% daily interest profit, no matter what the mining operations are on that day. In fact, the company takes it a step further and says, “A principal investment of $10,000.00 for a term of 365 days returns approximately $17.08 per hour, $410.00 per day and $149,650.00 per year.”
Some investors with Btcrush were invited by the team to act as sales agents, which included a 15% commission as incentive. This commission would be taken off the new investors deposit, specifically from the consumers that the sales agents recruit.
As for the mining videos, the first of the three that the company claims that it works from is called Maverik Farm. The company says that the farm is in the mountains, and that it functions as the most powerful one of all of their locations.
The second farm listed is Hephaestus Farm, which is described as the “most reliable and secretive farm located in a bunker of the Second World War times.” The third is supposedly located at “the former power station.” The Securities Commissioner has found that all of the images that show the alleged mining farms are complete illegitimate, since they are taken from stock photos that anyone can acquire.
Forex EA & Bitcoin Investment LLC
The other company involved in the order is Forex EA & Bitcoin Investment LLC, which is located in New York. The company is more commonly known as My Forex EA, and the marketers involved (James Butcher and Richard Dunn) are also noted in the “cease and desist” order. In their advertisements to entire users, they state:
“An investment of $500.00 in the Forex and Bitcoin trading program will return $5,000.00 in twenty-one calendar days…[and] an investment of $1,000.00 in the Forex and Bitcoin trading program will return $10,000.00 in twenty-one calendar days.”
Also, this claim applies to investments of $2,000 making $20,000, and investments of $5,000 earning $50,000 within the same amount of time. Everything on the website claims that there is no risk involved, even going as far as to say that no investor will ever be able to lose wait they invest with My Forex EA.
Security Laws and Violations
The fraud of making impossible promises is already immoral, but the securities and sales promised both violate the Securities Act by the Texas State Securities Board. The Act also requires that the companies and/or the agents have been registered with the commissioner, which they have not.
The orders show that Btcrush intentionally misleads users in several ways, such as their agreement upon signing up. The users much acknowledge that they sign up at their own risk and that they understand that the company can amend their rates without any agreement from members. However, this goes against their other statements of guaranteed profits.
The Securities Commissioner concludes with this statement, in regard to both companies:
“Respondents [both companies] are engaging in fraud in connection with the offer for sale of securities…[and] are making offers containing statements that are materially misleading or otherwise likely to deceive the public.”
Joseph Rotunda, who represents the Texas State Securities Board, is the Director of Enforcement had this to say to fellow cryptocurrency website, CCN:
“They weren’t just putting out a website and letting investors come to them. They weren’t just discussing investments on a message board. Their sales agents were specifically advertising and sending materials to Texas residents. They were communicating, ‘come to our website, register an account, purchase an investment.”
We hope this help you stay alert and on the look out for bitcoin scams and cloud mining pool fraud companies!