Travis J. Iles stands as the Texas Securities Commissioner, and entered an Emergency Cease and Desist order against South African Firms. This order pertains to fraudulently recruiting residents of Austin, Texas, in order to participate within a cryptocurrency credit card scheme.
Offering Crypto Card Services
The order itself targets one Lance Angus Jerrard, as well as his respective companies: Liquidity Gold Solution LLC, Liquidity Gold Trust, and Liquidity Gold Card Solution (PTY) LTD. The order itself accuses both Jerrard and his companies of running advertisements on a radio station broadcasting in Austin, going by the name of 590 AM KLBJ Radio. It’s claimed that they were promoting their schemes through various social media platforms and websites, such as Facebook, LinkedIn, and Twitter.
As the order detailed, the pitch was built on the cutting-edge technology of cryptocurrencies and blockchain, promoting the Liquidity Card. The claim these entities made was that it was a Mastercard that operates much like a traditional debit card. However, it was claimed that the Liquidity Card worked on stablecoins instead: cryptocurrencies pegged to real-world assets, such as fiat. According to the advertisements, this Liquidity Card worked three types of stablecoins: TrueUSD Coin (TUSD), USD Coin (USDC), as well as the PAX coin (PAX).
Openly Claiming To Dodge Tax
According to the order, these companies heralded the use of the Liquidity Card as a means to avoid taxation that would be done with regular fiat payments. They claimed that their Liquidity Card spent the stablecoins directly, hence avoiding fees when converting crypto to USD or other fiat currencies.
However, they claimed that this system would only work if they’ve raised a significant amount of cardholders. Thus, they claimed that they targeted Austin residents in order to raise the capital from the public to launch their global marketing campaign. It was claimed that this would begin in October of 2020, with a goal of 8 million cardholders being recruited in 36 months.
The Accusations Themselves
The Liquidity companies stand accused of concealing important information about their contracts, relationships, and compensation about the matter. They’re refraining from disclosing material information regarding their recruiting strategies or maintaining cardholders. Furthermore, they’re not providing material information regarding the use of money, nor are they disclosing the business plan’s significant levels of risk associated with it.
All the companies, as well as Jerrard himself, are not registered to sell securities within Texas, as well. With their investments not being registered, they are not permitted to sell them within the state of Texas.
As it stands now, the parties have 30 days’ time to challenge the entry of the order.