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Texas’ securities agency has issued another cryptocurrency related emergency cease-and-desist order, this time against DavorCoin. In the latest filing, signed late last week, the Texas State Securities Board (TSSB) alleges the company has been issuing unregistered securities with fraudulent and misleading information designed to lure and dupe investors.
What happened? DavorCoin launched a lending program that promised investors a significant return on investment, which falls under the agency’s definition of unregistered securities. The TSSB also alleged that the project is an investment fraud, because the company had intentionally hidden material information regarding its business, such as its location, as well as how it plans to realize investment promises for investors — who were solicited through websites, social media, and online advertisements.
According to the document, potential investors would need to purchase the project’s token using other cryptocurrencies. The company’s promises were detailed as follows: “At approximately 5:30 p.m. CST on Jan. 26, 2018, it [DavorCoin] represented that an investor lending $30,000 in DavorCoin who elects a ‘Locking period’ of 120 days may earn $513 per day, $3591 per seven days, $15,390 per 30 days and $107,217 as of the ‘capital release day’ of August 23, 2018.”
This most recent order yet again indicates the increasing level of focus Texas’ securities agency is giving to cryptocurrency-related investments. The agency maintains that its mandate is not to seek to regulate cryptocurrencies, but that it will continue monitoring cryptocurrency projects that aim to bring returns to investors.
In fact, DavorCoin appeared to step up marketing of its lending program following the closure of another cryptocurrency lending platform, BitConnect. On January 4th, TSSB Commissioner Travis J. Iles entered an emergency cease and desist order to stop the company’s “illegal and fraudulent offers of a different lending scheme.” He also warned would-be investors about investing in cryptocurrency-backed programs “without determining exactly what they are investing in.”
The agency also has been scrutinizing others as well: The DavorCoin order is the fourth emergency action against unregistered, overseas companies selling investments tied to cryptocurrencies. DavorCoin and BitConnect aside, the other two are: R2B Coin, a Hong Kong-based company selling investments in its own token, R2B, and telling investors the coin “will never go down in value;” And USI-Tech, a Dubai-based company, which promised triple-digit returns from investments tied to the mining of Bitcoin.
From the date of the filing, DavorCoin has 31 days to challenge the order before the State Office of Administrative Hearings.
George Fredrick 
Hellbenders 
CJ A Balmediano 
Ron D 
People involve in USI-Tech made return promises. Not the company.
Curious? What happens if they don’t comply? It is State level and not federal?
Texas tie your own people
If the companies model is unsustainable then why not simply let it die out on it’s own. As the price of the token falls and daily interest rates goes down less and less people will invest while others pull out. This would happen slowly and more orderly leaving less people to get burned. This would also allow the ones that lost money an opportunity to learn from a poor investment. You come in and shut the company down and the uninformed will blame the “scam” instead of taking responsibility for their own lack of research. Trying to shut them down by force insures everyone loses all invested money and no one learns a thing.
I feel DavorCoin is a great cryptocurrency, complete with an amazing platform and look forward to the new features to make the blockchain more stable and DavorCoin more valuable.