Crypto regulators around the world are always concerned about crypto scams, as the frequency of such scams keeps increasing with the development of the technology. These crypto scams are alarming for the economy as it can encourage hazardous activities like terror funding or money laundering. This time, it is Texas which has woke up to crypto scam incidents report.
An annual report prepared by the Texas State Securities Board states that the cryptocurrency industry is their priority this year. It notes that those crypto firms which were not on their radar a few years ago became their top priorities in 2018. The report claims that the number of scams in crypto has exceeded the number of scams in traditional asset classes such as stocks, futures, etc. In a year, Texas watchdog found 60 individuals and entities involved in suspecting crypto activities. Also, the regulators have issued a total of 16 orders against suspected cryptocurrency scam investments, in the period of 12 months.
The report says,
“Promoters of cryptocurrency-related offerings are taking advantage of the anonymity of the internet to attract victims, weaponizing social media to connect with investors in Texas,” adding, “In 2018, (the SSB) entered 16 administrative orders against promoters of suspect cryptocurrency investments who were using online advertisements, social media, and other solicitations to Collaborative Law Enforcement.”
The TSSB has paid more focus on the ICOs campaigns overseeing their operations. Notably, an infamous folded ICO project BitConnect has been accused of scamming many investors involving amounts in millions. A regulator in Texas noted,
“The emergency action effectively shut down the scam, as BitConnect almost immediately lost 99% of its market capitalization of $2.6 billion.”
Along with such fraud cases, the watchdogs have also been keenly examining crypto firms while keeping compliance laws and registration policies in focus. Here, The report added, “None of the individuals or firms was registered to sell securities in Texas.”
Texas regulators have been actively developing and implementing regulations for crypto space. In order to ensure investor safety, it has joined federal authorities. It is also taking action against crypto firms which avoids registering their services and business properly. The report also warns Texas residents against an individual who falsely claims to recover their losses caused by BitConnect for a $250 fee.