While nothing has emerged from the SEC yet regarding fraudulent ICO lending Ponzi schemes, Texas is on a roll.

An emergency cease and desist order against DavorCoin marks the third enforcement order Texas has taken against ICO lending Ponzi schemes.

For those unfamiliar with the scheme,
DavorCoin
is a 
BitConnect
ICO lending Ponzi clone.

The gist of the model sees anonymous admins launch an ICO, take in real money on the promise of a monthly ROI (paid out of invested funds) and eventually do a runner when withdrawals exceed new investment.

BitConnect’s recent collapse
resulted in widespread investor losses.

DavorCoin was heavily touted as a reload scam in the wake of BitConnect’s collapse.

Sadly for those gullible enough to fall for the same scam twice, investment in  DavorCoin has only resulted in bigger losses.

After hitting a brief pump spike of about $160 shortly after launch, DAV has since collapsed to around $5.

Texas’ cease and desist, issued on February 2nd,
accuses DavorCoin
of ‘
illegally and fraudulently offering investments in a cryptocurrency lending program in Texas
‘.

Citing their January 4th cease and desist against BitConnect, the Texas Securities Board acknowledges DavorCoin’s response.

On January 16, 2018, DavorCoin responded by announcing that “[t]his does not change anything for us” and that DavorCoin is now “the number one lending platform in the world!!”

DavorCoin also responded by announcing DavorCoin is “now the new standard… Many people are going to join us, the price will increase and all you already in the game with us will benefit from it”.

As with BitConnect and
R2B Coin
, DavorCoin is accused of illegally offering unregistered securities within Texas.

The investments in the DavorCoin lending program have not been registered by qualification, notification or coordination, and no permit has been granted for their sale in Texas.

DavorCoin has not been registered with the Securities Commissioner as a dealer or agent at any time material hereto.

The Texas Securities Board goes onto cite the following examples as evidence of DavorCoin’s ongoing fraudulent operations:

intentional failure to disclose the identity of DavorCoin’s principals

intentional failure to disclose DavorCoin’s principal place of business

intentional failure to disclose DavorCoin’s assets, liabilities and other financial information about its business

intentional failure to disclose the manner in which DavorCoin uses DAV tended by investors to generate a profit

The Securities Board has ordered DavorCoin immediately cease and desist from

offering for sale any security in Texas

acting as a securities dealer in Texas

engaging in any fraud in connection with the offer for sale of any security in Texas

offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public

DavorCoin and its affiliates face two years in prison and fines of up to $5000 if they

🤖 Quick Answer

What is DavorCoin and why did Texas issue a cease and desist order?
DavorCoin is an ICO lending scheme modeled after BitConnect, operating as a Ponzi scheme. It promised monthly returns on investment funded by new investor deposits. Texas issued an emergency cease and desist order as the third enforcement action against similar ICO lending Ponzi schemes operating within the state jurisdiction.

How does the DavorCoin scheme operate?
Anonymous administrators launch the ICO, collecting real money by promising monthly returns of investment paid from new investor funds rather than legitimate earnings. When withdrawal requests exceed incoming investments, operators abandon the scheme, resulting in investor losses and fraud.

What connection exists between DavorCoin and BitConnect?
DavorCoin emerged as a reload scam following BitConnect's collapse. It replicated BitConnect's fraudulent model, targeting investors who had suffered losses from the previous scheme, using similar

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