The Texas State Securities Board issued a report summarizing its a four-week investigation of securities offerings tied to virtual currencies. They opened 32 investigations in the period commencing December 18, 2017. Among the findings:
- No promoters were registered to sell securities in Texas, a violation of the Texas Securities Act;
- 30 promoters were broadly using websites, social media, and onlineadvertising to market to Texans;
- Seven promoters were offering securities tied to a new cryptocurrency;
- At least five promoters all but ignored investing risks by guaranteeing returns, some as high as 40% per month;
- Only 11 promoters provided potential investors with a physical address;
- At least six promoters were actively recruiting sales agents without verifying they were registered with the Securities Commissioner; and
Six of the offerings involved payment of a commission to investors who recruited new investors into the scheme.