Texas State Securities Board has issued an emergency cease-and-desist order against cryptocurrency trading company DavorCoin, which is offering investments in a cryptocurrency lending program.
It is the fourth such restriction order that the Texas authorities are issuing in just over a month on a crypto firm.
No other state in the US has taken strong regulatory actions against cryptocurrency fraud.
Texas Securities Commissioner Travis J. Iles entered an Emergency Cease-and-Desist Order against DavorCoin Friday.
The order comes after a one-month undercover investigation of cryptocurrency investment programs by the State Securities Board's Enforcement Division.
Joseph Rotunda, director of the enforcement division at the Texas State Securities Board, said DavorCoin is an unregistered firm and it is selling unregistered securities through affiliates, which violate the Texas Securities Act.
DavorCoin is telling investors they can earn lucrative profits by investing in a lending program based on their new cryptocurrency known as davorcoin.
Investors purchase davorcoin and then lend it to the crypto company.
It promises that an investor lending $30,000 in davorcoin may earn $15,390 in the first month of the program and receive $107,217 after 120 days.
DavorCoin, however, is not providing any details about how it will generate such profits.
DavorCoin claims to be "the number one lending platform in the world," and is telling investors that davorcoin "aims to become the best alternative to current popular coins such as Bitcoin and Ethereum."
DavorCoin appeared to step up marketing its lending program after the closure of another cryptocurrency lending platform, BitConnect.
Commissioner Iles warned would-be investors not to buy into the hype surrounding cryptocurrencies without determining exactly what they are investing in.
The others are Hong Kong-based R2B Coin, UK-based BitConnect, and Dubai-based USI-Tech.
by RTT Staff Writer
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