Texas Regulator Shuts Down Fraudulent Multilevel Marketing Crypto Firm
By RTTNews Staff Writer | Published: 7/10/2020 11:07 AM ET
The Commissioner of the Texas State Securities Board (TSSB) has issued an emergency cease-and-desist order against a South African cryptocurrency firm running an unregistered international, multilevel marketing get-rich-quick scheme in the State of Texas.
The Commissioner's order stopped Mirror Trading International Pty Ltd., controlled by Cornelius Johannes "Johan" Steynberg, from offering any security for sale in Texas until it is registered with or is exempted from registration by the Securities Commissioner.
The Commissioner has also named four of Mirror Trading's stateside, multilevel marketing agents – ForexAndBitcoin.com, Michael Cullison, Steve Herceg and Brian Knott – accusing them of illegally soliciting Texas investors.
According to the order, Mirror Trading is accused of recruiting multilevel marketers to illegally sell fraudulent investments in a bitcoin (BTC) and forex pool, which can be purchased by transferring bitcoin to Mirror Trading.
The bitcoins received from investors are then pooled and transferred to various unidentified forex brokers, the order says. The bitcoin is then supposedly somehow traded on the forex market using artificial intelligence, generating 'conservatively' projected profits of 10 percent per month.
The order alleges that Mirror Trading concealed material information from potential investors, including important information about Steynberg, its forex brokers, its handling of cryptocurrencies, the artificial intelligence used to place trades and the significant risks associated with the product.
The order accuses Mirror Trading of perpetrating the fraud though an illegal international multilevel marketing program. Mirror Trading is also recruiting unregistered securities salespersons by promising to pay up to four streams of lucrative commissions, based on their success in recruiting new investors and multilevel marketers.
Mirror Trading also boasted about the accomplishments of its multilevel marketers, claiming it has now enrolled almost 76,000 members from more than 170 countries, including more than 22,500 since March 1, 2020.
The TSSB has been one of the most active state regulators with regard to cryptocurrencies for the well-being of investors in Texas. It was the first to enter an order against a cryptocurrency firm and is among those who entered the most orders of any state regulator.
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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.
Article reposted on Markethive by Jeffrey Sloe