The crypto industry continues to be plagued by scams and Ponzi, and the Texas State Securities Board and Alabama Securities Commission are the latest to crack down on one such scam that compelled both the agencies to issue an emergency cease and desist order against the crypto scam company.
According to an announcement on August 14, South African companies Liquidity Gold Trust, Liquidity Gold Solution, and Liquidity Global Card Solution, operated by Lance Angus Jerrard, have received cease and desist orders simultaneously from The Texas State Securities Board (TSSB) and the Alabama Securities Commission (ASC).
Jerrard along with the firms has been accused of operating a major scam by promoting a fake product called the Liquidity Card on social media and a local Austin radio station, claiming that investors could make money from it during the pandemic sitting at home.
The ad reportedly said that the card was “a Mastercard that functions like a traditional debit card,” adding that their product could even help avoid taxes by receiving and spending profits as stablecoins including USD Coin (USDC), TrueUSD Coin (TUSD) and PAX Coin (PAX).
TSSB Enforcement Director Joe Rotunda said:
“The prospect of guaranteed monthly income may seem like a dream come true during times of economic uncertainty. Unfortunately, cryptocurrency scams typically fail to support promises of prosperity with facts and evidence. In the end, it’s often smoke and mirrors, with a technological twist.”
The announcement adds that the campaign was scheduled for launch in October and the company had plans of “recruiting 8 million cardholders in 36 months.”
As a part of the scheme, members were recruited and were asked to invest at least $1,150 in 1 or more of 8,400 portions in the company’s global project partnership.
Investors were then told that they’d be able to residuals derived from fees paid by Liquidity cardholders.
The TSSB’s announcement said:
“The Liquidity companies are projecting lucrative cashflow, claiming investors may receive $1,516.72 per portion per month after 18 months and $5,008.62 per month after 24 months. The profits are purportedly guaranteed. According to the order, the Liquidity companies are even offering investors a 100% written money-back guarantee.”
The order states that all these were false claims and Jerrard and the liquidity companies aren’t registered to sell securities.
The TSSB further added that the alleged companies withheld information from the cardholders regarding the various risks involved with the scheme and they’d get a return on their investment.
As of now, Jerrard and the related companies have 30 days to challenge the cease and desist order.