Coindesk.com reported the Texas State Securities Board released an emergency cease-and-desist notice against a man indulged in the sales of unregistered securities through a cryptocurrency platform.
The agency revealed the culprit as Mark Moncher and his company named Financial Freedom Club. He joined hands with Frank Dalotto, owner of 911MoneyStorey, to sell the shares. Moncher and Dalotto had promised citizens of Texas investment returns as high as 8 percent. SSB also revealed that involved parties mentioned securities as watches to keep the investment’s information confidential.
It said, “Dalotto, Moncher, and their companies are also encouraging investors to commit felony offenses in connection with an initial $2,000 investment in the trading program. According to the order, investors are told that after making the initial investment via a charge or debit card, they will receive an invoice for the purchase of ‘a gold Seiko watch which you’ll never get.”
The authority also said that Dalotto and Moncher have proved to be a wrong example for other crypto traders. They filed a materially false written statement through a financial institution which is a state criminal offense in Texas.
Apart from the illegal use of cryptocurrencies, the Financial Freedom Club and Moncher are also charged with faking another investment scheme. This time they worked with a firm named Capital Cash for growing cannabis. This scheme is fully separate from the former crime committed earlier.
Joseph Rotunda, SSB Enforcement Division director, said, “Investors need to continue to be cautious when investing with an online investment program. Their best defense is due diligence, but they should remember that fraudsters may be attempting to thwart their efforts to obtain meaningful information.”
Texas securities agency also issued another cease-and-desist order against DavorCoin this February. It was a crypto related lending scheme charged with selling unregistered securities with misleading information to attract customers. Earlier this year, TSSB filed A cease-and-desist order against an Initial Coin Offering project named R2B COIN. It also investigated BitConnect and ceased its operations after a class action lawsuit.
Forbes.com reported, Moncher was also accused of hiding the fact that court in Florida sentenced him 57 months of imprisonment in 2010 for a mortgage fraud scheme. Monscher, who accepted to commit mail and wire fraud, was fined with $1.9 million as compensation to cheated financial institutions.
Crypto fraud is not new as bitcoinist.com has recently reported the arrest of Coinnest’s CEO for fraud and Embezzlement. Coinnest is a popular South Korean crypto exchange which was charged for moving user’s fund in its own accounts. It is the first incident an employee of a crypto exchange is arrested by the South Korean government. The country is a hot spot for digital currency, and this incident has diminished investor’s trust in crypto controllers.
The Texas Security authorities have been active in investigating crypto related cases. Although, the US is a crypto backing country yet it has never held back operations against fraudsters. It is hoped that recent developments pose a positive message to crypto users and its dealers.