Yes, there are legitimate cryptocurrency-linked entities doing business in Texas, say state financial regulators. A ranking securities official notes, though, that “all the toxic companies” vying for public attention make it flatly hard for a consumer to find one.
And that, reportedly, spells an outsized problem for Texas. The state is not alone for having crypto-scheme fraudsters in its midst, of course, but it reportedly has more than many other states do. Joe Rotunda, who heads the enforcement arm of the Texas State Securities Board, says that fraudulent digital currency schemes now surpass all other scams across the state aimed at “separating Texas investors from their money.”
And, really, that hardly seems surprising. The virtual currency frenzy of recent months has been a front-page media phenomenon globally. The value of bitcoin (the most popular of all cryptocurrencies) spiked by a stunning 2,000 percent last year. Although its price has come back to earthly levels recently, legions of would-be investors are still willing to bet on another launch.
And scammers are ready to cater to their hopes and vulnerability.
That worries Rotunda and other regulators, in part because they command a close-in look at how illegitimate cryptocurrency companies operate and, moreover, see just how many there are operating in Texas.
One recent probe by investigators uncovered scores of unregistered entities making online marketing efforts. Some don’t even have an office address. Others made guarantees of spectacular profit margins for individuals who open their wallets.
Again, Rotunda and fellow investigators don’t deny the legitimacy of some companies doing business in Texas. Despite their presence, though, Rotunda says it seems like the digital currency realm “is just attracting the fraudsters.”