Texas Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order Dec. 20 against USI-Tech Limited, an overseas firm that is promising low-risk, triple-digit returns from investments tied to Bitcoin mining.

The enforcement staff of the State Securities Board presented evidence to the Securities Commissioner that USI-Tech, based in Dubai, and two U.S.-based sales agents are soliciting investors in dozens of Texas cities through targeted craigslist advertisements, YouTube videos, and standalone websites.

Neither USI-Tech nor the sales agents, Clifford Thomas of Suitland, Md., and Michael Rivera of Los Angeles, are registered to sell securities in Texas. The investment also is not registered in Texas.

The company and agents are offering for sale an investment contract in the mining of bitcoin. Mining uses significant amounts of computing power — and electricity consumption — to generate bitcoins for the decentralized online ledger that records and verifies bitcoin transactions.

The agents’ websites claim the mining investment “derives its value from [USI-Tech’s] non-exclusive interest in a series of Bitcoin mining contracts.” They promise a daily return of 1%.

The USI-Tech website says its Bitcoin platform “consistently provides returns of up to 150% per year.” The returns do not depend on the value of Bitcoin, according to the company.

The company and the sales agents are telling potential investors the mining contract is a “certified legal product in the USA per the FTC.”

The Federal Trade Commission, however, has no role in regulating registration of the mining investment as a security in Texas. The State Securities Board regulates the registration of the mining investment as a security in Texas, the registration of dealers and agents offering and selling the product, and the disclosure of material facts to investors.

Furthermore, the sales agents are attempting to deceive the public by claiming that USI-Tech has a “binding legal opinion” from a law firm stating the company is “a legal business in good standing.”

According to the order, USI-Tech is telling potential investors they can make more money by convincing other individuals to invest in the company’s bitcoin platform. Investors can earn “up to 35% commissions” through its “unique referral marketing plan.”

USI-Tech is not informing investors of the danger in being paid commissions from referrals. Individuals paid these commissions must either be registered with the State Securities Board or qualify for an exemption from registration.

In addition to violating registration requirements, USI-Tech and the sales agents are violating State Securities Board rules by failing to disclose information investors would need to make an informed decision about whether to invest. The disclosure violations include: