In February, the Texas State Securities Board (TSSB) filed its fifth cease-and-desist order for a cryptocurrency-related company, citing fraudulent and misleading behavior. The newest order targets LeadInvest, a cryptocurrency mining and fiat currency lending company promising insane returns in a matter of months.

According to CoinDesk, “The state regulator said it considers the firm’s cryptocurrency mining and trading programs to be unregistered security offerings and, furthermore, that LeadInvest is also using fake stock images to portray its team members.” In a recent episode of Ask Doctor Bitcoin, our friend Mark Hopkins explained some of the red flags to look for when investing in crypto-companies. He cautioned to research a company’s team, their history, and their contributions to the field to verify that the business is legitimate.

In the case of LeadInvest, their team—from designers and advisors to the legal firm and attorneys—all appeared to be fabricated using stock photos, headshots from models, and pictures from other real companies. According to the TSSB report, one image on the company’s website included Supreme Court Justice Ruth Bader Ginsburg alongside other U.S. government figures. There did not appear to be any factual information about any team member on the company’s website, which has been removed and redirected since the cease-and-desist order was filed.

The fictitious “team” may prove problematic for the TSSB “because of all these fictitious employees, the cease-and-desist order does not mention a specific person or group actually responsible for LeadInvest’s activities, which raises questions about the order’s enforceability.”

The TSSB continues their efforts to determine the legitimacy of cryptocurrency lending and investment companies that do business in Texas. The recent cease-and-desist orders against DavorCoin and BitConnect made similar allegations that the companies “had been issuing unregistered securities with fraudulent and misleading information designed to lure and dupe investors.

The LeadInvest website now redirects to bitcoinvest.de, which claims to be a “legitimate business” of financial and crypto-mining experts. It is unclear how or whether the two companies are related. 

Photo credit: Kimberly Vardeman, Flickr

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