Three firms, DigitalBank (DGBK Ltd.), Coins Miner Investment, and Ultimate Assets LLC have been banned within the Texas state borders as the Texas State Securities Board (TSSB) issued emergency cease and desist orders against the companies.
They were offering unregistered securities and used trick tactics such as lying about being endorsed by former US President Barack Obama. They were using fake Coinbase email credentials and were claiming high investment returns.
DGBK Ltd., a Belize-based company, states it is developing a hack-proof device to store and transfer cryptocurrencies and it was soliciting funds to develop a digital wallet for cryptocurrencies that can be opened using a person’s biometric data. According to the TSSB, the wallet will be unhackable and allow complete anonymous and untraceable transactions of virtual coins and fiat money.
In its marketing, DGBK Ltd has never at any point provided any information of the background of the major financial institution that they claim supports them and gave a false impression that Obama was backing the company.
DigitalBank also offered its own digital token called DGBK which the company said that investors who will purchase the token now will possibly earn a return of 1,900% once it is sold in an initial coin offering next year.
DigitalBank is also telling potential investors to participate in a bounty program that will permit them to earn compensation for referring new investors to the company. However, the company is not disclosing that participating in such a program requires a person to be registered to sell securities.
Ultimate Assets LLC
The second company, Ultimate Assets LLC, targeted Texas investors by presenting itself as a Massachusetts-registered cryptocurrency and forex trader via online advertisement. The company promised potential investors that an initial investment of $1,000 will turn into $10,000 in three weeks, an unrealistic ten times investment return.
The company is committing fraud by offering guarantees on initial investments without warning investors that their capital is at risk. It also seems to be a phantom company because it is not located at the address listed on its investment contract and the state of Massachusetts has no record of it.
Coins Miner Investment Ltd
The third company is Coins Miner Ltd., is soliciting funds from Texas residents by pretending to represent Coinbase crypto exchange and is lying about having support from established organizations, including media and the US start-up Ripple. The company offered investments in mining. It is based in Russia but claims to be based in the UK.
A Coins Miner affiliate, Ana Julia Lara, is at the center of it all as she falsely depicted herself as a Coinbase crypto trader showing investors a photograph of her posing with the president of crypto company Ripple. However, the person in the photograph is actually one of Cointelegraph’s vice presidents.