Texas Securities Commissioner Travis J. Iles on Feb. 2 entered an Emergency Cease and Desist Order against DavorCoin, an entity offering investments in a cryptocurrency lending program in Texas.

The emergency order found that DavorCoin is telling investors they can earn lucrative profits by investing in a lending program based on a new cryptocurrency known as davorcoin. Investors allegedly purchase davorcoin and then lend it to DavorCoin.

According to the order, DavorCoin says an investor lending $30,000 in davorcoin may earn $15,390 in the first month of the program and receive $107,217 after 120 days.

DavorCoin, however, is not providing any details about how it will generate such profits. DavorCoin also is not disclosing the identity of its principals or its place of business, claiming instead that “due to tax and regulation risks,” it “cannot officialize its domiciliation.”

DavorCoin appeared to step up marketing of its lending program after the closure of another cryptocurrency lending platform, BitConnect.

Commissioner Iles on Jan. 4 entered an Emergency Cease and Desist Order to stop BitConnect’s illegal and fraudulent offers of a different lending scheme.

According to the State Securities Board's Enforcement Division, DavorCoin responded to BitConnect’s closure by announcing “[t]his does not change anything for us,” and that DavorCoin is now “the number one lending platform in the world!!"

Commissioner Iles warned would-be investors not to buy into the hype surrounding cryptocurrencies without determining exactly what they are investing in.

“Promoters of fraudulent securitized cryptocurrencies are using technology in a way that conceals their identity and their actions,” he said. “Ultimately, investors are investing in nothing more than a promise made through a website maintained by an anonymous group.”

The Enforcement Division also found that DavorCoin is an unregistered firm and it is selling unregistered securities through affiliates, which violate the Texas Securities Act.

The DavorCoin order is the fourth emergency action against unregistered, overseas companies selling investments tied to cryptocurrencies. The others are:

-- R2B Coin, a Hong Kong-based company selling investments in its own currency, r2b coin, and telling investors the coin "will never go down in value";

-- BitConnect, a United Kingdom-based company that at the time of the order claimed a market value of $4.1 billion for its BitConnect Coin currency;

-- USI-Tech, a Dubai-based company, which promised triple-digit returns from investments tied to the mining of Bitcoin.

The four companies named in orders have solicited Texas investors through websites, social media, and online advertisements.

DavorCoin is telling investors that davorcoin "aims to become the best alternative to current popular coins such as Bitcoin and Ethereum."

The company is recruiting individuals who are not registered as securities dealers or agents to act as its affiliates and offer investments in the DAVORCOIN Lending Program in Texas.

DavorCoin has 31 days to challenge the order before the State Office of Administrative Hearings.