Texas Takes Aim at Overseas ICO with Cease-and-Desist

The Texas State Securities Board has ordered a cease-and-desist to an overseas ICO that allegedly solicited investors within its jurisdiction.

AccessTimeIconFeb 2, 2018 at 12:30 p.m. UTC
Updated Sep 13, 2021 at 7:31 a.m. UTC
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A state securities regulator in Texas has put out yet another cease-and-desist order on cryptocurrency-related activities.

According to an emergency order signed on Jan. 24, the Texas State Securities Board (TSSB) is taking aim at a Hong Kong-based firm dubbed R2B Coin, which the agency alleges is issuing unregistered securities to Texas residents with false and misleading information.

According to the R2B website, the firm says its pre-mined cryptocurrency "R2B Coin" will have an offering price ranging from $0.008 to $188. It further claims that "R2B Coins will reach $200 within three months after the start of trading, and will be among top 10 currencies in 1–1.5 years."

The state agency states that such offering, which is being promoted by "misleading and deceptive" information, falls under the definition of securities.

While the firm claims to be globally licensed, the Texas regulator said R2B is not registered in its jurisdiction and thus has violated securities regulations by soliciting investors from Texas through a series of conference calls.

The document further details that the company has allegedly claimed to have 14,500 investors participating in the project from 34 countries including the U.S., Sweden, Italy and India. It has also allegedly promoted R2B Coin's potential by making misleading promises; for example, that investors may swap their tokens for public stocks at exchanges in Hong Kong or New York.

As such the Texas agency is seeking the emergency order to halt R2B Coin's activity targeting residents in Texas. R2B Coin has 31 days after reception of the order to file an appeal. The firm has not responded to an email enquiry sent by CoinDesk for comments.

The cease-and-desist is the state's third against a crypto company since December last year, signalling the agency's increasing oversight over cryptocurrency related investments. Previously, it has also given similar orders to Dubai-based USI-Tech, as well as BitConnect, which was subsequently shut down and is now facing mounting class action suits.

Texas map via Shutterstock.

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