- Sales of MCcoin, a cryptocurrency offered by a European investment platform, have been banned in Texas
- A cease and desist order has been sent to operators Mind Capital, who are based in Estonia and Spain
- The Texas Securities Commissioner claims that the sale of MCcoin tokens constitute a pyramid scheme
A cryptocurrency “pyramid scheme” operated by Spanish and Estonian company Mind Capital OÜ, has been banned in Texas after the state’s Securities Commissioner brought an emergency action to halt their activities. Mind Capital is the company behind the MCcoin cryptocurrency, the purchasing of which supposedly lets users gain access to a crypto trading platform, but the commissioner claims that the token sale mechanism puts it firmly in the pyramid scheme category.
MCcoin Utility Token Likened to Pyramid Scheme
According to the cease and desist order issued last week, MCcoin tokens are “persistently valued at $1.00” and are supposed to allow investors access to a crypto-fiat arbitrage trading program. This platform claims to use advanced algorithms to analyze the cryptocurrency market and identify when to buy and sell, with Mind Capital proclaiming the platform’s success and claiming it takes between 0.5% and 1.5% returns on a daily basis.
However, Securities Commissioner Travis J. Iles claims in the order that several recent cases have involved fraudulent trading schemes built around some kind of new artificial intelligence or secretive software:
“These schemes can be dangerous. Although promoters may boast about the successes of these platforms, potential investors are rarely afforded the opportunity to verify their claims – or even determine whether the applications actually exist.”
OneCoin-style Pyramid Scheme
Crucial to the order is the fact that the sale of MCcoin tokens takes the form of a ten-level “pyramid scheme” to encourage sales of its token packages, reminiscent of the type of techniques used by scams such as OneCoin. Sales agents are tasked with selling tokens, but they can earn more money by recruiting sales agents below them, creating the ‘upline’ for which pyramid schemes are famous.
The order alleges the Mind Capital are intentionally concealing key information from investors, such as the risks associated with the MCcoin crypto offering and the trading platform. The company is also accused of withholding critical information about its ability to actually generate represented returns, according to the order.