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3 Crytocurrency-Related Scams

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Commissioner Travis J. Iles of the Texas State Securities Board has reportedly taken emergency action against three separate companies involving in the cryptocurrency scams.

According to the 18th September report by Texas State Securities Board, Iles has issued 3 cease-and-desist orders against Coins Miner Investment Ltd., DGBK Ltd. and Ultimate Assets LLC.

Coins Miner Solicit Funds from Texas Residents

Russia-based cryptocurrency investment promoter, Coins Miner Investment Ltd. is charged for fraudulent scheme after the regulatory agency found manipulate email and online media solicitations to seek funds from Texas residents. The investment promoter also went as far as deceiving them by disguising as a representative of Coinbase, a San-Francisco based company that runs cryptocurrency platform.

Ana Julia Lara, who claimed to be an affiliate of Coins Miner, was the one responsible for creating the bogus email. She is also accused for claiming to work as a vice president of CoinTelegraph Media Group.

Coins Miner went further by claiming to be a company operated in the United Kingdom, even though they were actually based in the Russian city of Volgograd. The company also illegally promoted its website by posting the video of a Fortune journalist discussing cryptocurrencies and even included stock video footage to showcase its “expert team” of employees from technical to financial professionals. The footage also added the company’s office as well as other relevant facilities to manipulate the residents.

DGBK Ltd. Develops a Bogus Digital Wallet Purportedly Endorsed By Obama

The second cease and desist letter involved DGBK Ltd., also known as DigitalBank. DGBK is charged for creating a so-called hack-proof digital wallet to store and transfer cryptocurrencies.

The Texas State Securities Board reported that the Belize-based company has been soliciting funds to develop a digital wallet known as the “Photon Encrypted Ledger Key”. According to the company, the digital wallet can be used to open using a person’s biometric data. The wallet will also allow transfer regardless of cryptocurrencies or flat currency such as the U.S. Dollar completely anonymous and untraceable.

DigitalBank had also provided prospective investors with the company’s shares as well as a chance to purchase its own virtual digital currency in the form of a token called DGBK. Investors were enticed to buy the token with promises of a 1,900% lucrative return when it is sold in an initial coin offering (ICO) next year.

The regulatory agency also pressed charges against the company for misleading the public using a 33-sec video of then-President of the United States, Barack Obama, promoting the Photon Encrypted Ledger Key. The video was actually captured during the 2016 South by Southwest interactive festival in Austin, Texas.

Ultimate Assets LLC Used Online Advertisements to Promote Fraudulent Investments

The third cease-and-desist letter is directed to Arlington-based Ultimate Assets LLC, the company which had published online advertisement soliciting funds from Texas residents to promote their fraudulent investments.

According to the company, the investments would guarantee the potential investors a whopping 900% ROI in Bitcoin and Forex trading. For instance, an initial investment of US$1,000 will snowballed into a large sum of money totalling US$10,000 in just 3 weeks. The company also went as far as to claim that the investment included a contract that said, “a refund will be issued in cases where the investment could not yield profits.”