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Texas takes action against “fake” Binance for luring investors

Binance symbol with chart in the background

Texas security board had previously issued an advisory warning against the business, stating that it illegally offering securities paying “ridiculous” returns

The Texas State Securities Board (TSSB) has issued an emergency cease and desist order against a fraudulent crypto entity that has allegedly been misappropriating the Binance brand to falsely lure investors.

The move is the latest action taken by Texan regulators to showcase their concern against cryptocurrencies. Previously, the securities board had stated that crypto investment schemes are a risk to Main Street investors and issued numerous public warnings against possible crypto-related scams during the COVID-19 pandemic.

The business, which is the target of the cease-and-desist order, has claimed it is operating out of the UK and has previously received an advisory warning from securities regulators in the Philippines — yesterday’s announcement from the TSSB revealed.

The advisory warning had cautioned the public to stay away from Delta Crypt, stating that the entity was “illegally offering securities paying ‘ridiculous’ returns.” This incident prompted the crypto entity to ditch its erstwhile name ‘Delta Crypt’.

Now, the business is being accused of selling online investment schemes using misleading brand names including Binance Assets, BinanceAssets Ltd and Bit Kind Ltd while not even being registered to sell securities in Texas. The TSSB explained the entity’s approach to lure investors by saying:

“The pitch is relatively simple – invest a little, gain a lot, and don’t worry about risk. In fact, the ‘Gold Plan’ pays a guaranteed 30% return, and the ‘Diamond Plan’ pays a guaranteed 40% return.”

The TSSB has found that not only are these offerings fraudulent and deceptive but Delta Crypt has concealed crucial information from its principles, including the advisory warning it received from the Enforcement and Investor Protection Department of the Philippines Securities and Exchange Commission.

Furthermore, the entity has failed to warn investors of the inherent risks associated with cryptocurrency investments and has illegally solicited its sale agents, TSSB said. This means that the company has pledged to pay commissions to investors without abiding by registration requirements or licensure.

“Bad actors continue to use online means – such as internet websites and social media platforms – to broadly market ‘risk-free’ scams to Texas investors,” said Securities Commissioner Travis J. Iles.

“These folks flock to the Lone Star State and investors should be very wary of promoters touting guaranteed lucrative returns through online media and should thoroughly investigate any offering before investing their money,” Commissioner Iles added.

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