A cryptocurrency investment scheme is facing a state-level crackdown. Texas authorities have issued an emergency cease and desist order against Mind Capital, accusing the company of running an unregistered securities operation.
The Texas State Securities Board found that Mind Capital OU and Mind Capital Tech SL operated an illegal crypto-fiat arbitrage trading program without proper registration. The company never registered with the state's Securities Commissioner as a dealer or agent, and the investments themselves were never registered for sale in Texas. By offering these securities anyway, Mind Capital violated state law.
The board identified a second problem: the company's referral plan operates like a pyramid scheme. Investors were incentivized to recruit others rather than earn returns from legitimate trading activity.
The cease and desist order reaches beyond the company itself. Texas named six executives and employees: Gonzalo Garcia-Pelayo, the president and CEO; Oscar Garcia-Pelayo, vice-president; Ruben Arcas, network construction consultant; Manuel Arniz, expansion manager; Christina Kelly Lopez, social media director; and Alejandro Mejia, brand and creative director. The board also named promoter Craig Kintzel in the order.
Kintzel's track record raises additional red flags. According to his personal Facebook profile, he has ties to Healy, QuiAri, Elepreneurs, Vasayo, and OneCoin—companies that have faced serious legal scrutiny. A YouTube channel under his name uploaded a USI-Tech promotion two years ago. USI-Tech has been widely documented as a Ponzi scheme.
Mind Capital has thirty-one days to respond to the Texas order. If the company fails to respond, the state will issue a permanent injunction.
The company wasn't caught off guard entirely. Spain issued a securities fraud warning against Mind Capital on January 13th. Three days later, the company publicly denied engaging in any fraud.
This isn't the first time analysts have flagged the company's business model. BehindMLM reviewed Mind Capital in January 2020 and concluded it was a Ponzi scheme based on how it operated. That assessment appears consistent with how Texas regulators now view the operation.
Whether the SEC is investigating Mind Capital at the federal level remains unclear. For now, the company faces a hard deadline: respond to Texas authorities or face permanent injunction.
🤖 Quick Answer
What enforcement action did Texas authorities take against Mind Capital?The Texas State Securities Board issued an emergency cease and desist order against Mind Capital OU and Mind Capital Tech SL, halting their unregistered securities operations. The order targeted the company's illegal crypto-fiat arbitrage trading program operating without proper state registration or Securities Commissioner authorization.
Why did Texas regulators determine Mind Capital violated state securities laws?
Mind Capital offered unregistered investment securities without registering as a dealer or agent with Texas authorities. The company failed to register its securities for sale in the state, directly contravening Texas securities regulations and operating an unregistered investment scheme.
What secondary violation did authorities identify in Mind Capital's business model?
Regulators discovered Mind Capital operated a referral plan structured like a pyramid scheme. The compensation model incentivized investors to recruit additional participants rather than generating returns from legitimate investment activities or trading profits.
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