The Texas State Securities Board (TSSB) has issued an emergency cease and desist order against a cryptocurrency platform backed by American Express, alleging that the platform has been involved in a fraudulent scheme that has cost investors millions of dollars.
The platform, known as My Crypto Mine, was founded in 2018 and is based in Austin, Texas. It is owned by a company called My Crypto Mine LLC, which is owned by two individuals, Michael Ryan and Christopher M. Parris.
The TSSB alleges that My Crypto Mine has been operating as an unregistered securities dealer and has been engaging in fraud by making false and misleading statements to investors. The TSSB also alleges that My Crypto Mine has been operating a Ponzi scheme, in which new investors’ money is used to pay off earlier investors.
The TSSB alleges that My Crypto Mine has raised more than $4 million from investors, and that the majority of the money has been used to pay off earlier investors, rather than being invested in cryptocurrency.
The TSSB has ordered My Crypto Mine to immediately cease and desist from offering or selling securities in Texas, and has frozen the company’s assets. The TSSB is also seeking to have the company’s owners, Ryan and Parris, held liable for the alleged fraud.
The TSSB’s action against My Crypto Mine is a reminder that investors should be wary of any cryptocurrency platform that is not properly registered with the appropriate regulatory authorities. Investors should also be aware that cryptocurrency investments can be highly risky and that they should always do their own research before investing.
The Texas State Securities Board has recently filed fraud charges against an American Express-backed cryptocurrency platform, accusing the platform of misleading investors and permitting fraudulent trading activity. The platform, Crypto Asset Management (CAM), based in Austin, was launched in late 2019 for retail customers.
The charges are particularly noteworthy because of the fact that BitConnect has been backed by American Express. The financial giant had previously granted BitConnect an eWallet service and direct deposits of US dollars via American Express cards. The company has since shut down the service.
The Consumer Financial Protection Bureau has also launched a complaint against the giant financial technology company Experian alleging that the company misled consumers about the security and privacy of their personal information.
American Express responded to the charges, questioning the legality of the move by the Texas Regulator. The representative claims that American Express has been illegally charging its customers for merchant services in the form of discounts, fees, and incentives. American Express disagrees and has asked the courts in Texas to intervene and declare that the representative’s decision is invalid.
The fraud charges form yet another chapter in the ongoing saga of the charges and counter-charges between Texas regulators and the American Express-backed crypto platform. It is clear that the lengthy court battle against the platform and its founder is far from over. With the Texas State Securities Board and the Consumer Financial Protection Bureau both taking action, it is likely that the platform will face further charges in the near future.