Crypto Debit Card Fraud: Two States Sanction S.African Companies

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Texas and Alabama authorities have issued an emergency cease along with the desist orders to the firms in South Africa while promoting a crypto debit card fraud scheme. The announcement has been made on the 14th of August, 2020 from the Alabama Securities Commission (ASC) and The Texas State Securities Board (TSSB), who had issued the cease and the desist orders simultaneously against Lance Angus Jerrard and the various South African companies such as Liquidity Global Card Solution, Liquidity Gold Solution and Liquidity Gold Trust.

PDF Source: Texas State Securities Board

All of the companies as mentioned above and Jerrard are accused of committing crypto debit card fraud by the promotion of a product named the “Liquidity Card”. The product was promoted on both a local Austin radio station and on the social media, that falsely claimed investors possesses a guaranteed way for making money while they are at home during this Covid-19 pandemic. They reportedly stated that the card was “a Mastercard that performs similar to a traditional debit card”.

The firms have reportedly utilized their ad time for stating that their product would aid the cardholders to avoid taxes as they can receive and spend profits as stablecoins that included PAX Coin (PAX), TrueUSD Coin (TUSD) and USD Coin (USDC).

“The prospect of guaranteed monthly income may seem like a dream come true during times of economic uncertainty,” said TSSB Enforcement Director Joe Rotunda. “Unfortunately, cryptocurrency scams typically fail to support promises of prosperity with facts and evidence. In the end, it’s often smoke and mirrors, with a technological twist.”

Working Procedure of The Scam

As reported and stated by the announcement, the campaign was supposed to be launched in October, aiming to recruit eight million cardholders in 36 months (3 years). The scheme performs by absorbing new members and involving them to invest at the minimum $1,150 in one or excess of 8,400 portions in the global project partnership of Liquidity. The investors would then allegedly be able to earn the residuals that have been derived from the fees cleared by the Liquidity cardholders.

crypto-debit-card-fraud
Image: Bitcoin News

The announcement of TSSB stated:

“The Liquidity companies are projecting lucrative cashflow, claiming investors may receive $1,516.72 per portion per month after 18 months and $5,008.62 per month after 24 months. The profits are purportedly guaranteed. According to the order, the Liquidity companies are even offering investors a 100% written money-back guarantee.”

As per the cease and the desist order, all of these claims are fraudulent and that it is a clear case of crypto debit card fraud. Additionally, the Liquidity company trio and Jerard are not registered to sell the securities in Texas. The TSSB has reported that they had concealed the crucial information to prospective cardholders based on the risk that is associated with the scheme and the procedure in which they would be able to receive a return on the investment they made.

It has also been informed that Jerard and the associated firms have a maximum of 30 days for challenging the cease and the desist order.

Source: CoinTelegraph


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