Texan authorities issued an emergency cease and desist order against two brokers and their executives after they allegedly promoted a fraudulent Bitcoin investment scheme in the U.S., as per a document published by the Texas State Security Board this week.
The two entities - Forex Birds and Pek Universe - were offering online investments tied to foreign currency exchange and Bitcoin, boasting returns of over 5% every 24 hours in one of their “investment plans.” The duo even promised insurance for all investor deposits up to $1 million, the document showed.
But regulators found the claims were false, and that both Pek Universe and Forex Birds were not registered to deal in securities in Texas. They then filed a court order.
The alleged masterminds behind the scheme are Kumar Babu Bondesi and Darwin Eric Balusek – the latter calling himself “Bitcoin Pope” in advertisements and among investors, the document said.
To lure investors, the duo reportedly positioned the two companies as an “amazing avenue” for individuals interested in cryptocurrency and forex investments, even claiming to provide a “hundred percent profit” margin.
Of the two, Pek Universe promoted various cryptocurrency investment programs such as a 1.9% return per day for 30 days in one of its plans and was accused of using fraudulent photographs on its board of directors to mislead potential investors.
On the other hand, Forex Birds was accused of falsely touting its legitimacy to lure investors. The firm allegedly told customers it was regulated and registered with the “Europian [sic] and Investments Commission” as well as the Australian Securities and Investments Commission.
Commissioner Travis Iles, who issued the cease and desist order, said that the promoters of such fraudulent schemes take advantage of gullible investors to propagate their scams.
However, he indicated that preventing such schemes was possible, saying” due diligence may be the single most effective fraud-preventing measure for investors.”
The development is the latest in a long list of Bitcoin scams, which have long plagued the crypto industry ever since the asset class gained prominence. In 2019 alone, scammers made away with a mammoth $4.3 billion using a variety of crypto schemes.