/Texas Regulator Takes ‘Emergency’ Action Against Obvious Crypto Scam

Texas Regulator Takes ‘Emergency’ Action Against Obvious Crypto Scam

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Travis J. Iles, the Securities Commissioner of Texas, isn’t taking any guff from a site called FxBitGlobe. Iles issued an “emergency” cease and desist order to FxBitGlobe, ordering them to quit attempting to do business with anyone in the great State of Texas.

Site Lists Fake Houston Address

The order outlines the hilarity of the scam in exhaustive detail that only a group of lawyers could manage. For one thing, FxBitGlobe lists an address in Houston which doesn’t exist. For another, they claim to be a member of the SIPC, which is easily verifiable for a regulator and is untrue. The order calls this a “misrepresentation of relevant facts.”

FxBitGlobe offers anywhere from 25 to 75% returns, depending on the amount invested. They don’t describe anywhere how they garner these returns. Setups like this are usually the cardinal signs of a Ponzi scheme, and in crypto, we’ve seen so many of them that it’s absurd. Crypto Ponzi schemes have the added benefit of market volatility: from time to time they succeed longer than traditional Ponzis might because of the amount made on the Bitcoin.

On top of all this, the firm has an affiliate program. The regulator considers affiliates to be “unregistered sales agents.”

In addition to offering unregistered investments, the company is recruiting unregistered sales agents and promising them a commission equal to 5% of a new client’s principal investment.

FxBitGlobe doesn’t provide any information on how they will make these alleged returns. They do, however, provide false registration and business information.

Referral commissions have long been a critical driving force in the expansion of Ponzi schemes. While a legitimate tool in many enterprises, they pervert the natural course of decision making. People bring their friends on board, sometimes actually believing they’re getting into something great, only to lose everything – including their friendships – later on.

Victims Who Refer Others = “Unregistered Sales Agents”

FxBitGlobe gets 31 days from April 9th to respond in court. The Texas government could bring actual suit and charges against the company if it finds any of its agents live in Texas. Further, if FxBitGlobe victimizes anyone in Texas, criminal fraud actions could be brought.

All of which is based on the strong assumption that FxBitGlobe is a current Ponzi scheme. Having a look at their website and offerings, this reporter, who has years of experience tracking Bitcoin scams, sees no reason to doubt the Texas Securities Commissioner’s assessment.

FxBitGlobe offers investments between $500 and $50,000, in four tiers. Unlike most crypto Ponzis, which pay out daily, hourly, or even by the minute, FxBitGlobe pays out once a week. All of its business registration and administrative details appear to be “phantom.” It’s mostly a website designed to funnel money to its creators.

We made an account to see how deposits are handled. If you select the “Paypal” deposit option, the site sends you an e-mail that reads, in part:

Details on how to make payments is being processed and will be forwarded to you shortly.

Similarly, if you decide to use bank wire, you get basically the same message:

This is what you get, instead of deposit instructions, when you request to make a deposit to FxBitGlobe. Presumably they must personally instruct each victim how to give over their hard-earned cash.

Presumably, deposit details have to change frequently, and the company needs to basically tailor them to each victim.

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