Texas-based Balanced Energy LLC has reportedly been told by the Texas State Securities Board to stop getting itself involved with bitcoin, according to a number of reports.
The Southlake company was reportedly raising capital using the digital currency and selling unregistered securities — something the Board says took place at the Texas Bitcoin Conference in Austin recently.
“Balanced Energy and Johnson are accepting payment through Bitcoin, a digital currency that incorporates cryptography and is designed to enable users to send money over the Internet without using a credit card or bank account,” the board wrote in a statement. “Balanced Energy has failed to disclose to investors the risks in using Bitcoin to purchase working interests in wells, according to the order. The price of digital currency is subject to extreme swings, which could affect the amount of money available for business operations.”
According to the Board’s regulations, a firm must restrict unregistered securities investments to accredited investors or individuals whose income exceeds $200,000 per year.
Balanced Energy President Kirk Johnson reportedly told the board his company did not do any verification of who bought the securities, noting that the firm is not the “paperwork police.” [source: Austin Business Journal, News-Journal.com]