State Securities Board Starts Second Regulatory Sweep of Crypto Investments

Jun 28

Texas Securities Commissioner Travis J. Iles on June 28 entered three emergency cease and desist orders against promoters of fraudulent cryptocurrency-related investments who are soliciting Texas residents through Facebook “work from home” forums.

The orders stem from an initiative by the Enforcement Division of the State Securities Board, which last week started an investigative sweep of suspect cryptocurrency offerings after the price of bitcoin nearly tripled in the past three months.

This is the Enforcement Division’s second regulatory sweep of cryptocurrency investment offerings. The first started in December 2017, also in response to a sharp increase in the price of bitcoin and other cryptocurrencies.

The first sweep resulted in 10 emergency injunctive actions against promoters illegally or fraudulently offering securities tied to cryptocurrencies in Texas.

To date, the State Securities Board has taken emergency action against 61 parties in 22 administrative cases involving investments tied to cryptocurrencies.

The three individuals and one company named in the June 28 orders are recruiting potential investors through advertisements on public Facebook groups for Texans working from home or interested in doing so.

People who respond to the Facebook ads are being directed to contact the investment promoters through Facebook-owned WhatsApp, an encrypted instant-messaging platform. 

Two of the promoters – Mikhail Rania Safiya of London, and Madeline O’Farrell, who lists an address in Belize – are promising investors they can earn lucrative profits for them by trading bitcoin and other cryptocurrencies and foreign currencies.

Both promoters are reaching potential investors through ads on the Facebook Group titled “Work From Home | Earn Money Online | San Antonio Texas.”

Neither Safiya nor O’Farrell are registered to sell securities, according to the orders, and both are intentionally failing to disclose the risks of trading cryptocurrencies, foreign currencies, and other products.

Safiya, according to the order, is directing potential investors to an online platform that supposedly allows for the trading of bitcoin and foreign currencies. Safiya is encouraging potential investors to create an account on the platform and fund it with bitcoin.

According to order, Safiya is telling investors she will access their bitcoin on the platform and trade their principal for a profit, taking 20% of the profits as her payment. Safiya is informing investors they must disclose their login credentials to her, which gives her access to their bitcoin and the ability to transfer it to a digital wallet she controls.

A third order alleges that Tint X Mining, based in India, is fraudulently offering Texas investors the opportunity to earn lucrative returns through bitcoin mining.

The company and a promoter, Maxi Samantha Fortune, are recruiting potential investors through ads on the public Facebook Group titled “Texas Work From Home.”

Tint X Mining is telling investors they can earn $213,300 over three months on an initial investment of $5,100 in the company’s bitcoin mining operation.

According to the order, Tint X Mining is falsely claiming it is a licensed firm. The company is also not disclosing any of the risks in mining cryptocurrencies, nor is it providing any information about its expertise or track record in bitcoin mining.