- The company wasn’t licensed to operate as a dealer
- They published false information on its official website
- The Texas authority has been zealous in its fight against cryptocurrency-related fraud
The Texas Securities Commissioner has issued a cease and desist order against EXY Crypto. The Canadian-based company was not licensed by the commission to act as a cryptocurrency dealer.
According to the order filed on Tuesday, November 6 against the Quebec-based EXECRYPTO, Morgan Nolan, Rafael Logan and Melissa Spring, the respondents have been offering a cryptocurrency mining program issued by EXY Crypto following a promotion they did on LinkedIn.
The order signed by Securities Commissioner Travis J. Iles, they proclaimed the security of their cryptocurrency investment and claimed investors would earn a 10 percent return-on-investment weekly besides falsely claiming EXY Crypto was a duly licensed or registered company.
The charge states further that the official website of EXY Crypto duped potential investors to believe it was genuine by publishing photographs of people alleging to be investors. However, the people is those photographs were not actual investors in the firm, which deceptively accrediting testimonials to those people.
Contrary to the legal requirement, the respondents have not disclosed material facts about the firm including the identity, experience, and qualifications of its principal officials including its capitalization, assets, and liabilities. The law also requires cryptocurrency mining companies to disclose other material facts like the hardware they use in the crypto mining operations.
The Securities Commissioner has concluded that the respondents are engaged in fraudulent activities related to the offer for sale of securities and making deceptive statements to the public that could cause irreparable harm.
Over 200 active investigations
The massive anti-crypto operation dubbed “Operation Cryptosweep” has been making major waves in the United States. Under the control of the North American Securities Administrators Association (NASAA), the aim of the project is to target ICOs and other crypto-related companies and projects that operate or do business in the United States.
In a recent press release by NASAA, there were over 200 active investigations going on courtesy of state and provincial securities regulators. The operation that began in May 2018 had seen close to “46 enforcement actions” by August 31, 2018. Most of these actions come as cease and desist order besides different types of information demand letters.
Most of the cease and desist letters are state specific and demand that a company stop doing business in that particular state. The Texan authority has been zealous in its fight against cryptocurrency-related fraud and has affected several companies including Mintage Mining LLC, Symatri LLC, and NUI Social, from fraudulently offering cryptocurrency investments to Texas residents.