On May 15, 2020, the Texas Securities Commission announced that it had sent a cease and desist order to Nickola Steele. The announcement state that Steele had defrauded Texans by soliciting funds in a crypto scam via his CryptoFacts Facebook page.
The Order is Non-Appeal-able
Steele, who also goes by the aliases Nick Vop Steele and Nick Steele, placed ads on Craigslist soliciting for $5000 to $50,000, according to the order. He received funds from investors via a PayPal business account that was held by Nuvop Inc, which is controlled by Steele.
In a recent Craigslist ad, Steele claimed he had made huge profits on Ethereum and Bitcoin between February and March this year. Steele, who is from Illinois, charges investors a 20% fee, which he described as a “trade consulting fee.” He promised investors they would receive dividends after a 12-month lock period.
In the non-appeal-able order, the Texan authorities list various issues they have with Steele. However, the crux of the matter appears to be Steele’s false claim about his trading expertise, which has led to losses for investors.
The claims made by Steele contain the hallmarks of an investment scam. Steele also claimed he had been trading for a long time. However, investigations revealed he had been operating the scam for less than a year.
Texan Authorities Have intensified the Crackdown on Crypto Scams
The Texas financial watchdog is one of the most active when it comes to stopping crypto scammers. It often teams up with federal regulators to pursue crypto businesses breaking the rules. For instance, a 2019 report by the Texas State Securities Board showed that it had intensified its monitoring of crypto activities. Crypto investment schemes are now amongst its top priorities, surpassing even those in the traditional financial system.
The TSSB is especially interested in ICOs. Its focus on this area was highlighted during its first case against an ICO that was held by BitConnect. The project later folded, and the Texan authorities prosecuted BitConnect for defrauding investors of millions of dollars.
Besides pursuing those involved in fraud, the TSSB has also been pursuing those flaunting state and federal registration requirements.