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The Texas Securities Commissioner (TSC) Travis J. Iles recently took emergency action to stop the fraudulent offerings of investments in three separate schemes involving cryptocurrencies.
The TSC has issued Emergency Cease and Desist Order against Coins Miner Investment Ltd., DGBK Ltd., and Ultimate Assets LLC.
The TSC found that Coins Miner made a number of false claims and misrepresentations, including manipulating its email solicitations to make them appear as if they came from Coinbase, a fraudulent video of a Fortune journalist promoting its offering, its location (the company claims to be based in the UK, but actually operates from Russia), among others.
“The Coins Miner investments are securities under Texas law, but the offerings are not registered for sale in Texas and neither Coins Miner nor Lara [Ana Julia Lara, a person affiliated with Coins Miner] are registered to sell securities,” the Texas Securities Commission said in a statement.
The regulator has also taken action against DGBK Ltd., also known as DigitalBank, a Belize-based company that says it is developing a hack-proof device to store and transfer cryptocurrencies. In its investigations, the Texas State Securities Board (SSB) found that the company used a 33-second video of Barack Obama to promote itself.
The TSC said that DigitalBank is not informing investors about its technical and financial support. The company is also not providing background information of most of its employees.
“The investments DigitalBank is offering are securities regulated by Texas law, according to the order. Neither the company nor the principals named in the order are registered to sell securities in Texas,” the TSC said. “DigitalBank and two of its principals are telling potential investors that they can participate in a “bounty program” that permits them to earn compensation for referring new investors to the company. But the company is not disclosing that participating in such a program requires a person to be registered to sell securities.”
The third company allegedly engaged in fraudulent crypto, forex offerings is Ultimate Assets, which is telling potential investors that an initial investment of $1,000 will turn into $10,000 in three weeks. I
In its investigations, the SSB found that Ultimate Assets is in fact a “phantom entity” and is not located at the address listed on its investment contract. The state of Massachusetts has no record of corporate filings by this firm.
“The investments being offered are securities under Texas law. Daniel Dishmon and John Jason Woodard, the individuals named in the order, are violating the Texas Securities Act by offering securities investments without being registered with the Securities Commissioner,” the TSC said. “Ultimate Assets, Dishmon and Woodard are also engaging in fraud by failing to inform investors of the regulatory, market, and technical risks in the trading of cryptocurrencies and foreign currencies.”
