ASC issues emergency cease-desist order for cryptocurrency exchange

The Alabama Securities Commission issued an emergency cease and desist order against a binary option and cryptocurrency exchange selling illegal investment contracts in binary options, Forex and cryptocurrency trades to Alabama residents.

ASC Director Joseph P. Borg said the commission took this action in the public interest to protect Alabama investors. The suspected business Fxcryptofair and the account manager going by the name Barbara Lawson have been ordered to immediately cease and desist from sales of any securities in Alabama.

Commission staff received a registration and interstate commerce inquiry from the National Futures Association on Sept. 13. Representatives of the NFA were seeking the registration status of FXCF after receiving a complaint at their office. According to the NFA inquiry, the original complainant had invested funds with Lawson and had not received their stated monthly returns, according to a ASC press release.

The trades outlined by Lawson to the investor appear to be investment contracts/and or a profit-sharing agreement. Both FXCF and Lawson (as an account manager) are required to be registered with the ASC by law. A review of the registration files of ASC revealed neither was registered to offer securities to Alabamians, or from within Alabama to other states.

FXCF is an online entity that purports to be an online exchange company based in New York and Florida, and allegedly is located at 217 Summit Boulevard, Birmingham. FXCF is not at this address, which is at The Summit shopping centre.

Unverified statements of profitability and growth by unregulated corporations who sell securities in Alabama offer no protections for investors and are highly speculative and often fraudulent. ASC has issued 16 cease and desist orders involving crypto-currency and currently has five active crypto related inquiries or investigations as part of its initiative to protect investors.

While not every ICO or crypto-currency related investment is fraud, it is important for individuals purchasing these products to realize they are highly speculative and very often based outside the United States, and are rarely regulated. Investors are advised to do their own research, show due diligence and be aware of the risk.

To view the administrative order (CD-2019-0028) in its entirety, go to: www.asc.alabama.gov; click the Enforcement tab and then Administrative Actions.

“Be cautious when dealing with promoters who claim their ICO or crypto-currency offering is exempt from securities registration but do not ask about your income, net worth or level of investing sophistication,” Borg said. “Do your homework and contact the ASC with any concerns before parting with your hard-earned money — afterward may be too late.”