A Spanish and Estonian domiciled company was ordered today by the Texas Securities Commissioner to shut down operations on charges that he defrauded people by soliciting investments in a phony cryptocurrency trading scheme.
Mind Capital OÜ, aka Mind Capital Tech SL, has received an emergency securities fraud cease and desist from Texas. The order also applies to promoting its utility token, MCcoin, which the company claims to be persistently valued at $1.00.
The legal notice also names Mind Capital’s executive as respondents to the order, including president and CEO Gonzalo Garcia-Pelayo, vice president Oscar Garcia-Pelayo, social media director Cristina Kelly Lopez, among many others.
The board alleges Mind Capital is perpetuating a multilevel marketing scheme using agents in the United States to sell fraudulent investments to Texans. They hired multilevel marketers to promote its fraudulent investment opportunities by promising them lucrative commissions based on how well they recruit other multilevel marketers and investors.
Evolving Risk Management Tools in Online TradingGo to article >>
In particular, the company claims that MCcoin buyers can participate in a crypto-fiat arbitrage trading program which uses ‘advanced algorithms’ to analyze the cryptocurrency market to spot profitable trades and identify the appropriate time to buy and sell.
Their most recent ad claims they earned “huge profits” on digital assets trades and that Mind Capital yields between 0.5 and 1.5 percent returns on a daily basis. These claims carry the hallmarks of investment fraud.
The order draws attention to AI scams
These promotions were made through recruiting a Georgetown resident called Craig Kintzel as an agent for illegally selling the bogus investments. Kintzel and other agents, while were not registered to offer securities in Texas, allegedly receives eight percent of the profits earned by referred investors. The promoters also earned between two and eight percent of the profits earned by recruited investors at various levels of the pyramid.
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 Mind Capital’s business is that he falsely touts his cryptocurrency trading prowess, causing losses for clients.
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. “Although promoters may boast about the successes of these platforms, potential investors are rarely afforded the opportunity to verify their claims – or even determine whether the applications actually exist,” said the commissioner.