Securities Commissioner Issues Order Stopping Fraudulent Cryptocurrency Trading Program

Apr 16

Securities Commissioner Travis J. Iles entered an emergency cease and desist order to stop offers of a fraudulent cryptocurrency trading program in Texas. The action names Bitles Limited and Janis Lacis, its principal, and C3 Data Services and Edward Carter, its principal. Bitles and Lacis are allegedly in London while C3 Data Services and Carter are allegedly in Princeton, Texas. 

According to the order, Bitles and Lacis are directing potential investors to deposit principal in one of eight different “savings plans.” They claim proprietary algorithmic trading software referred to as the Cryp-Spider AI Algo-Trading System that trades the principal across different cryptocurrency exchanges. The artificial intelligence’s cryptocurrency trading purportedly generates daily returns between 0.3% and 6.0% of principal, and Bitles and Lacis are promising to pay other profits derived from speculation on the relative value of cryptocurrencies and the US Dollar. 

In addition, Bitles and Lacis are issuing and promoting the sale of BTL Tokens. According to the order, they have been referring to BTL Tokens as “internal tokens” and describe BTL Tokens as utility coins – a term that typically refers to tokens used to purchase goods or services from an issuer. In this case, however, the order accuses Bitles and Lacis of claiming the BTL Tokens will appreciate in value – as much as 10 to 60% per month – and that holders of the BTL Tokens will realize profits of at least 30% per month. 

“The price and market capitalization of cryptocurrencies has sharply increased over the previous year,” said Joe Rotunda, TSSB Enforcement Director. “Unfortunately, promoters of illegal crypto-get-rich-quick schemes are taking advantage of these changes to the market – leveraging widespread interest to peddle fraudulent products. Texans interested in purchasing securities tied to cryptocurrencies should be aware of considerable risks and deal only with issuers lawfully operating in Texas.” 

The order also alleges Bitles and Lacis are recruiting sales agents to recruit Texas investors. Their recruitment allegedly requires attendance of a seven-day training program – and after the conclusion of this program, sales agents purportedly expect to receive at least $10,000 per month through commissions, bonuses, awards and prizes including a Rolex Watch, luxury yacht and a villa in Dubai.

According to the order, however, the parties are not registered to offer securities in Texas and they are recruiting sales agents who are not registered to offer securities in Texas. Likewise, the investments in the cryptocurrency trading program are not registered or permitted for sale in Texas.

The order also alleges the offering is a fraud. The parties are accused of concealing critical information, such as the identity and qualifications of traders and key personnel, information relating to the Cryp-Spider AI and financial information relating to business operations. 

“Many legitimate high-tech businesses are embracing digital assets and blockchain technology. The excitement surrounding these assets and technologies has also stoked bad actors seeking to prey upon unsuspecting investors” said Commissioner Iles. “Our goal is to promote legitimate capital formation and innovation by protecting the public from fraudulent cryptocurrency schemes. Today’s order stops such a fraudulent offering and protects Texas investors from financial harm.”