When the Southlake, Texas-based company Balanced Energy LLC sought investments in West Texas oil wells earlier this month at the Texas Bitcoin Conference held in Austin, none suspected that the Texas State Securities Board would oppose it. Now, it is clear that the regulatory body does not want the energy company to go ahead with the decision.
In its statement the Texas State Securities Board warned the energy company to immediately stop accepting Bitcoin investments and selling unregistered securities. The regulatory body is concerned about the security of the investors as according to it Bitcoin and similar other digital currencies have been receiving ire from government world around for insecurity.
The Texas State Securities Board said that Balanced Energy and Johnson are accepting payment through Bitcoin, a digital currency that incorporates cryptography and is designed to enable users to send money over the Internet without using a credit card or bank account.
Balanced Energy Failed to Disclose Investors the Risks in Using Bitcoin
The major concern according to the Texas State Securities Board is that Balanced Energy has failed to disclose to investors the risks in using Bitcoin to purchase working interests in wells. Additionally according to the order issued by the regulatory body the price of digital currency is subject to extreme swings, which could affect the amount of money available for business operations.
In his statement to press Joseph Rotunda, director of enforcement on the Securities Board said that digital currencies right now are very, very trendy and there’s a lot of buzz about them. It’s really easy to look at the benefits, the positives of digital currencies, without really appreciating these risks.
Joseph Rotunda is not alone who says that Bitcoin is extremely volatile and risky as similar views came from securities Commissioner John Morgan who said that in many ways, digital currencies operate as ‘online cash,’ only this type of currency is extremely volatile and can disappear the same way your money disappears when you lose your wallet.
Bitcoin Users Need to Do Due Diligence Says Rotunda
Joseph Rotunda said that as Bitcoin users need to do due diligence as according to him it’s a real fertile ground and anybody who is investing in digital currencies is going to be highly dependent upon the securities systems, the infrastructure, the accounting practices, overall business model of whomever they’re entrusting the custody of their investment to.
To contact the reporter of this story: Deepak Tiwari at email@example.com