Texas Securities Commissioner issues Cease & Desist Order against EXY Crypto

Maria Nikolova

EXY Crypto has not been registered with the Securities Commissioner as a dealer.

Texas Securities Commissioner Travis J. Iles has signed a Cease & Desist Order as to EXY Crypto, aka EXECRYPTO, Morgan Nolan, Rafael Logan and Melissa Spring.

The respondents, all of whom are from Quebec, Canada, are offering investments in a cryptocurrency mining program issued by EXY Crypto. The respondents use LinkedIn to promote the offer. The advertisements tout the security of the cryptocurrency investments and claim investors will earn at least a 10% return on a weekly basis. The advertisements also claim that EXY Crypto is a licensed and/or registered company.

Furthermore, the EXY Crypto website is publishing photographs of people purporting to be investors in EXY Crypto. However, these photographs are not of actual investors in the entity, and EXY Crypto is falsely attributing testimonials to these persons.

Also, EXY Crypto has not been registered with the Securities Commissioner as a dealer.

The respondents are said to have failed to disclose material facts about EXY Crypto, including the identity, the experience and qualifications of its principals, as well as its assets, liabilities and capitalization. The respondents have also failed to disclose a number of material facts about EXY Crypto’s mining operations, such as the type of hardware used to mine cryptocurrencies.

The authorities have concluded that the respondents are engaging in fraud in connection with the offer for sale of securities, making statements that deceive the public, and causing irreparable harm.

The Texan authorities have been active in their fight against cryptocurrency-related fraud. In July this year, for instance, Travis J. Iles took emergency action to stop a network of companies – including Mintage Mining LLC, Symatri LLC, and NUI Social, from fraudulently offering cryptocurrency investments to Texas residents.

Let’s note that, in 2018, the efforts to put an end to cryptocurrency fraud accelerated. One of the results of these efforts is “Operation Cryptosweep”. In an announcement published in late August, the North American Securities Administrators Association (NASAA) said that over 200 active investigations of Initial Coin Offerings (ICOs) and cryptocurrency-related investment products were underway by regulators in the United States and Canada as part of “Operation Cryptosweep.” Since its launch in May, this campaign has led to 47 enforcement actions involving ICOs or cryptocurrency-related investment products. In the end of May, the number of such actions was 35.

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