Texas aggressive in probing cryptocurrency fraud

The term “cryptocurrency” is certainly something that didn’t appear in any dictionary a few short years ago.

These days, though, cryptocurrency — think especially bitcoin — dominates news headlines. Recently, of course, the frenzy surrounding bitcoin’s storied price rise prominently played out in media outlets globally. As a Bloomberg article notes, the perceived value of the alternative-to-cash product “skyrocketed in 2017.”

That concerns securities regulators.

It especially concerns state officials in Texas, which Bloomberg identifies as “the most active state in cracking down on alleged [cryptocurrency] scams.”

Those ruses involve initial coin offerings, with an onslaught of actors deemed disreputable by the Texas State Securities Board emerging in the cryptocurrency universe with touted can’t-be-beat deals aimed at hungry investors.

The Bloomberg piece notes Texas’ centrality as a vanguard state cracking down on alleged cryptocurrency securities fraud, pointing to the state’s long history dealing with scams in multiple realms, especially the oil and gas industry.

“We see a lot of fraud in Texas,” says a principal securities regulator.

What grabs the attention of investigators are pitched deals that are similarly touted in other fraud-driven areas. Task force teams closely scrutinize offers that promise guaranteed returns and no-risk opportunities, as well as false claims concerning things like company capitalization and past performance.

And Lone Star State investigators are not working alone in their identification/enforcement activities. Reportedly, the U.S. Securities and Exchange Commission is closely involved as well. A leading SEC regulator points to “dozens” of outstanding probes that have been spearheaded by the commission.

Individuals and companies involved with cryptocurrency in any manner can reasonably expect close and continued scrutiny from state and federal regulators. Securities officials across the country almost unanimously agree that cryptocurrency fraud is a major and growing risk.