Texas Watchdog Accuses South African Firms of Crypto Fraud
The Texas State Securities Board (TSSB) is following through on its promise to crack down on cryptocurrency fraud. On Friday, the TSSB ordered Lance Angus Jerrard to cease operations immediately, alleging the South African resident operates a double-your money scam.
The SEC calls Jerrard the mastermind of Liquidity Gold Trust, Liquidity Gold Solution LLC and Liquidity Global Card Solution (PTY) LTD, which lured investors with claims of major credit card partnerships and misrepresentations about their products.
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According to TSSB documents, these particular crypto fraud artists were caught running advertisements on a local radio station that broadcasts in Austin, Texas.
Additionally, the watchdog alleges that these companies are promoting the Liquidity Card, a self-described crypto Mastercard that uses stablecoins to function like a traditional debit card. The scammers alleged they work with well-known stablcoin issuers including USD Coin (USDC), TrueUSD Coin (TUSD) and PAX Coin (PAX).
“The Liquidity companies are allegedly attempting to capitalize on the hype, incorporating stablecoins into traditional financial transactions. According to the order, they are touting the benefits of using stablecoins and the Liquidity Card, specifically representing cardholders can use the Liquidity Card to receive and spend profits as stablecoins, avoiding taxes that would otherwise be recognized when converting cryptocurrencies to dollars or other fiat currency,” the TSSB said.
The board alleges the Liquidity companies is perpetuating a multilevel marketing scheme that sells fraudulent investments to Texans and investors elsewhere. They hired multilevel marketers to promote its fraudulent investment opportunities by promising them lucrative commissions based on how well they buy “portions” in their project partnership .
Their most recent ad claims each portion costs $1,150 and entitles purchasers to residual income derived from fees paid by cardholders. They further claim huge returns and that investors “may receive $1,516.72 per portion per month after 18 months and $5,008.62 per month after 24 months,” the order further explains.
Throughout the write-up, the state of Texas lists a number of details, but it seems that the main issue that the authority has with Jerrard’s business is that he falsely touts lucrative cashflow for his cryptocurrency projects and a 100% written money back guarantee.
Finally, Commissioner Iles notes that get-rich-quick schemes gain momentum, elaborating that several recent cases involve fraudulent trading built around alleged new artificial intelligence or secret software.
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