BTCRUSH Scam Hit With Emergency Cease And Desist Order
Texas Securities Commissioner Travis J. Iles on May 8 ordered emergency action against the BTCRUSH scam who is fraudulently offering a high-return investment in a program tied to cryptocurrencies.
The company in response to this order on May 9 amended the terms of service on its publicly accessible website to say that “use of its current Platform by US citizens and permanent residents is strictly prohibited.”
According to the order, Bitcoin Trading & Cloud Mining Ltd. also known as BTCRUSH violated the Texas Securities Act by failing to disclose any material information about their principals, strategies, finances, and the extensive technical and regulatory risks of their cryptocurrency-related offering.
BTCRUSH, whose principals list an address in London, is soliciting Texas investors with the promise of huge returns from the mining of cryptocurrencies at three massive computing centers featured in videos on the company’s website.
The videos are not evidence of anything and BTCRUSH created the videos by manipulating stock footage available for sale on the internet.
Left, a still from stock video footage available for sale on Pond5.com. Right, a still from video footage on BTCRUSH website that purportedly shows one of its crypto-mining facilities
BTCRUSH doesn’t disclose the locations of the sites but describes one as “a secluded place in the mountains hiding incredible computing power.” Another site is purportedly located in a bombproof shelter from “the Second World War times.”
BTCRUSH describes itself as a cloud-based cryptocurrency mining company that mines both Bitcoin and other virtual currencies, known as alt-coins. The company is offering investments in a program it says will sell newly created alt-coins to buy bitcoins, an established currency.
Unlike traditional bitcoin mining, cloud-based mining doesn’t require a user to own any computer hardware or have any technical expertise. Instead, vast numbers of computer “mining rigs” are housed in a facility owned by the company, and investors purchase contracts that entitle them to a share of the virtual currency that is created through mining.
BTCRUSH claims an investment in its mining investment program has been paying 4.1% interest daily on a lifetime contract since going live on March 8, 2018. According to the order, that means a $10,000 investment would return $410 per day and $149,650 over one year.
BTCRUSH promises investors a “100% satisfaction guarantee,” but also “reserves the right to amend” the interest rate it pays “without agreement from investors.”
BTCRUSH requires investors to agree that a “‘private transaction rule” releases the platform from federal oversight, according to the order.
The so-called “private transaction rule,” which isn’t explained, does not exempt BTCRUSH from the Texas Securities Act because the company is offering investments in Texas.
None of the principals of either company is registered to sell securities in Texas, and the securities themselves are unregistered. Both are violations of the Texas Securities Act.
The cryptocurrency mining company Bitcoin Trading & Cloud Mining Ltd. said it is no longer accepting investments from the United States. The company’s statement came less than one day after the Texas Securities Commissioner entered an Emergency Cease and Desist Order against the company.
The company said that “due to local laws and regulations,” it “reserves the right to block the registrations originating from the USA or from US citizens located abroad. . .”
The language was not on the BTCRUSH website on May 8, the day of the emergency action.