Securities watchdogs in both Alabama and Texas issued a cease and desist order following a crypto credit card scam promoted by South African firms. Accordance to a joint order issued by both the Texas State Securities Board (TSSB) and the Alabama Securities Commission (ASC), companies such as the South African Liquidity Gold Trust, Liquidity Gold Solution and Liquidity Global Card Solution and an individual named Lance Angus Jerrard have issued prohibition orders.
As per reports, the sanctioned firms and Jerrard advertised a fraudulent debit card, dubbed Liquidity Card on social networks and a radio station in Austin, Texas. The perpetrators wrongfully stated that there is a secure way for people to make money while staying at home amid the COVID-19 disaster.
Crypto credit card scam breakdown
The firms allegedly utilized their advertisements to claim that Liquid Card could help investors evade taxes by transacting in stablecoins such as TUSD, USDC and PAX coin. The fraudsters were to recruit and convince new users to commit a minimum of $1,150 in one portion or more of 8,400 parts in the crypto credit card scam. Furthermore, the investors claim that the debit card functions as a traditional debit card.
The project, which was scheduled to start in October, aimed to register over 8 million new users in 36 months. According to the joint order release, the firms mentioned above offer investors a written 100 percent cash back guarantee, which the order terms as fraudulent. Notably, the watchdogs also noted that they had disguised vital information; the risks posed by the project to potential cardholders, and how they make money from the capital employed.
Involved parties have 30 days to issue a response
According to the prohibition order, all the liquidity companies listed are under no obligation to sell securities in Texas or Alabama. Moreover, the firms allegedly used fake pictures to lure investors into the crypto credit card scam. The authorities have given all the involved firms a 30-days grace period to respond to the cease and desist order.
