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Emergency Cease and Desist for Crypto-Promoter
Cryptocurrency has been dominating the headlines. It seems like it is impossible to visit a financial website without encountering articles on cryptocurrencies such as Bitcoin, Litecoin, Ethereum, the list goes on. So much so that it has left advisors and their clients looking for ways to “get in on action”. It has also left Government’s and SRO’s wondering how they can regulate the marketplace and help protect those participating in it.
Recently the Texas State Securities Board issued an emergency cease and desist for BitConnect. The Securities Commissioner found that the BitConnect investments are securities, but were not registered as required by the Texas Securities Act and State Securities Board Rules and Regulations. In addition, the company is not registered to sell securities in Texas. Texas becomes the first state to issue an administrative order on cryptocurrency investments.
The world of cryptocurrency is still in its infancy. Investing in cryptocurrencies carries significant risk because of regulatory and legal actions, competition from other cryptocurrencies, cybercrime and the extreme volatility in the price of many cryptocurrencies. The cease and desist is a stark reminder to conduct thorough due diligence before considering any type of crypto exchange, digital wallet, cryptocurrency or any other tool synonymous with the world of cryptocurrency.