The Texas Securities Commissioner has issued an emergency cease and desist order against My Crypto Mine and Mark Royer, an individual involved with the company, in the latest wave of enforcement action against illegal initial coin offerings (ICOs).
Royer is accused of acting on a behalf of a disbarred attorney, Samuel Mendez, and a “white collar criminal” Bruce Bise, in offer crypto tokens known as bitqy through a company, BitQyck. Urging investors who missed out on BTC to back BitQyck, the bitqy tokens have subsequently turned out to be near worthless.
At the time of selling tokens to investors, Royer said they were available for $0.02, with the implication that prices would rise to $3 per token. In reality, the tokens are now worthless, with most of those who invested having lost the entirety of their invested principal.
The filing identifies Royer as working for a new firm, My Crypto Mine, without disclosing his prior affiliation with BitQyck and bitqy. My Crypto Mine appeals to investors in Texas and elsewhere to invest in the company, with the promise of significant returns from crypto mining—ironically at a time when some of the world’s largest crypto mining companies are filing for bankruptcy.
The cease and desist order says My Crypto Mine is issuing unregistered securities, and that the respondents are not registered with the Securities Commissioner as agents or dealers, a position that is in breach of securities laws.
The order also alleges that My Crypto Mine has failed to disclose material details to investors, both about the business and about Royer’s past affiliations with potentially fraudulent cryptocurrency schemes.
There has also been a failure to disclose risks to investors appropriately, including notices that government actions could ultimately affect the value of any investment in the company.
The respondents have been ordered to cease and desist from offering securities in Texas, and from acting as dealers and agents in the offer of these securities. It comes as the latest example of a securities regulator cracking down on fraudulent ICOs and token sales, which continue to exploit unsuspecting investors globally.