Texas State Securities Board has reached an agreement with four cryptocurrency companies operating in the state, all of whom agreed to halt their security token offerings. The board announced the news in a February 21 order, saying that the decision was the result of a nine-month-long legal process. The four companies were accused of selling unregistered securities, the order said.
Respondents listed in the order are Mintage Mining, BC Holdings and Investments, Social Membership Network Holding, Nui Social, and manager Darren Olayan. All of the entities are required to pay an administrative fine of $25,000 as part of the proceedings.
The Texas State Securities Board (SSB) identified token offerings by the companies as falling under the definition of securities. Local legislation requires different licensing and documentation to be submitted for securities, which is why the companies entered into a legal dispute with the SSB.
The latest order issued by the board solidifies these findings and requires the companies to halt all activities regarding STOs until they provide adequate licenses. All of the respondents named by the SSB signed the order.
While the move itself is regarded as a victory for the Securities Board in Texas, it is just a part of the board’s ongoing crackdown on unregistered securities sales. The emerging cryptocurrency sector has seen an increase in unregulated and illicit token offerings, which prompted intense scrutiny from the United States Securities and Exchange Commission (SEC).
Earlier in February, the Texas State Securities Board said that a total of 16 orders were issued to cryptocurrency businesses in 2018 alone. All of them are suspected of being either outright scams or being misleading to investors. One of the companies that received the order is BitConnect, one of the largest Ponzi schemes of the decade, currently a focus of an FBI investigation.