Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order to stop a fraudulent scheme promoted through Reddit, a popular social media platform. Reddit permits users to share links, text posts, and images, and to correspond through private messages. It is one of the most visited websites in the United States, according to many reports.
The order names Cryptobase, also known as Crypt-Base, and Aaron Maxwell. It alleges that Maxwell is soliciting persons participating in r/stocks, a forum of reddit generally referred to as a subreddit, dedicated to the discussion of stocks. According to the order, Maxwell is sending private messages to these users, offering them the opportunity to participate in a forex trading program through Cryptobase.
The parties claim the forex trading program generates lucrative returns paid on a weekly or monthly basis. Maxwell is telling users the investments are guaranteed, and investors will receive 300, 400 or even 500 percent on a weekly basis. These statements are fraudulent, according to the order.
“Scammers are continuing to tap the power of social media,” said Commissioner Iles. “They can use online marketing tools to quickly reach may potential victims. Investors should be wary whenever an unknown person approaches them through the internet, promising untold wealth and income.”
Cryptobase and Maxwell are not registered with the Securities Board, and the investments in the forex trading program are not registered with the Securities Commissioner.
Enforcement Director Joe Rotunda encouraged investors to thoroughly investigate investments before sending money. “People work hard to accumulate savings over the course of years, or over the course of a lifetime. We encourage the public to take the time to conduct due diligence before parting with their savings.”
Investors can begin conducting due diligence by contacting their state securities regulator. Texans can access the Texas State Securities Board through its internet website at www.ssb.texas.gov, and they can send an inquiry to its Enforcement Division by email at firstname.lastname@example.org.