On Feb. 21, 2019, Texas state securities regulators entered a first-of-its-kind consent order against several out-of-state companies that offered cryptocurrency mining-based investments. The order determined that the investments were “securities” under Texas law, and that neither the offerors nor the securities had been registered with the state.
The U.S. Securities and Exchange Commission has been taking aggressive steps in the crypto-investment space over the past two years, but Texas is believed to be the first state to levy a monetary fine against the offerors of cryptocurrency-based investments. Taking a cue from recent SEC actions, Texas also became the first state to require the offerors to contact investors with a rescission offer for the full amount of their investments, less any profits.
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