Authorities in Texas have taken swift action against individuals accused of promoting a fraudulent cryptocurrency investment scheme. The emergency cease-and-desist order was issued in response to allegations of misleading investors through promises of high returns on digital asset arbitrage trading. The scheme, linked to Trage Technologies, reportedly utilized illegal multilevel marketing tactics and falsely claimed SEC registration, putting retail investors at significant risk.
Texas Cracks Down on Alleged Cryptocurrency Investment Fraud
Travis J. Iles, the Texas Securities Commissioner, wasted no time in filing an Emergency Cease and Desist Order against Darrell Porter and Eric Ture Muhammad for their involvement in promoting illicit cryptocurrency investments.
The order specifically targets their association with a cryptocurrency arbitrage trading scheme operated by Trage Technologies Ltd., which has been accused of deceiving investors. According to the announcement:
The order alleges that Porter and Muhammad engaged in the illegal promotion of investments linked to digital asset arbitrage trading, promising substantial returns. For instance, a principal investment of 10,000 USDT was said to yield 3,600 USDT per month or 43,800 USDT after a year.
Despite the enticing promises of high returns, the Texas Commissioner’s office asserts that Trage Technologies deliberately withheld crucial information about its leadership and employed an illegal MLM structure to recruit agents. Moreover, the company allegedly misrepresented its registration status with the SEC and claimed eligibility for Regulation D, Rule 506(c) protections. Travis J. Iles warned:
“Unscrupulous individuals are leveraging technological advancements to perpetrate fraudulent schemes, posing a serious threat to unsuspecting retail investors through a combination of modern technology and traditional sales tactics.”
However, Texas officials argue that Trage Technologies fails to meet the requirements of Regulation D, as it neither restricts sales to accredited investors nor verifies their accreditation status. Joe Rotunda, the Enforcement Director of TSSB, further commented:
Trage Technologies is not only falsely asserting SEC registration but also falsely claiming eligibility for safe harbor treatment.
Porter and Muhammad have a track record of promoting other companies like GS Partners and Billionico Academy, both of which have faced legal actions in the past. The accused individuals have a limited timeframe of 31 days to challenge the cease-and-desist order.
What are your thoughts on the recent cease-and-desist order issued against Porter and Muhammad for their alleged involvement in fraudulent cryptocurrency investments? Feel free to share your opinions in the comments section below.