Betty Crocker’s mixing bowl must be spinning out of control to hear that a company called BitQyck, Inc. (not to be confused with Bisquick™), has been scamming investors out of their hard-earned dough in yet another cryptocurrency securities investment fraud scheme.
According to the SEC Complaint, a person investing $5,000 was supposed to receive “250,000 Bitqy Coins representing 25,000 shares of Bitqyck common stock.”
For approximately two years, Bitqyck, and Texas owners Bruce Bise and Samuel Mendez, raised over $13 million from more than 13,000 investors through a digital token fraudulent scheme. They marketed “two digital tokens—Bitqy and BitqyM—to prospective investors in 45 U.S. states, two U.S. territories, and 20 countries through multiple, fraudulent unregistered digital asset securities offerings. …” SEC Complaint.
Bitqyck claimed to have “‘…authorized one billion shares of common stock’ and ‘…the minting of ten billion digital tokens known as bitqy tokens….” Bitgy token owners supposedly also received a 1/10 of a share of Bitqyck, Inc. common stock,…’” SEC Complaint.
A Nod to Groupon
Not just any digital token scheme was good enough for this commercial fraud duo. Defendants invented an e-commerce scheme called QyckDeals to increase the demand for Bitgy tokens. “Defendants described QyckDeals as an online ‘daily-deals platform much like Groupon…to connect millions of consumers and affiliates with local and global merchants who offer discounts, coupons, or vouchers on goods and services.’ According to Defendants, every time a consumer purchased a discounted offer from a QyckDeals participating merchant, the consumer and merchant would receive a ‘reward’ of Bitqy as a percentage of the transaction. …” SEC Complaint.
To be fair, defendants did sell some products and offered some rewards. However, the guarantee of common stock ownership through a smart contract was no guarantee at all. The only owners of Bitgy common stock were Bise and Mendez. Why? The “smart contract” part of the digital coin purchase was not executable code, but rather a note field. If you don’t understand this prior sentence, do NOT invest in any digital token, cryptocurrency investment before reading more about the world of cryptocurrency. The cryptocurrency market is filled with investment fraud, and is ripe for commercial litigation.
Bise and Mendez’s filings with the Texas Secretary of State’s office even listed them as the 100% owners of Bitqyck. Therefore, Bitgy investors never received dividends nor distributions. To make matters worse, QyckDeals was never really operational due to a “lack of participating businesses and technology limitations.” Not surprising, none of these details were communicated to investors. SEC Complaint
Who has the Money?
Bise received approximately $684,000 in personal distributions and expenses while Mendez took approximately $645,000. And, to keep the scheme going, “Defendants paid $4.5 million as sales commissions to investors who referred new investors to Bitqyck. Collectively, investors lost more than two-thirds of their investments.” SEC Complaint.
Injunction (Hope for Investors)
Bise and Mendez recently agreed to a number of injunctions issued by the Court that will prevent them from issuing, purchasing or selling securities other than for their own personal accounts. Bitqyck consented to pay disgorgement, prejudgment interest and a civil penalty of over $8 million. Bise agreed to pay approximately $890,000, and Mendez agreed to $850,000. SEC Press Release.
Digital coin investment opportunities reach far beyond Bitcoin. Securities investment opportunities are ripe for investment fraud while investors seek the next market to make money in technology investments. We hope your investments yield high rewards. However, if you find yourself in need of commercial lawyer or a breach of contract attorney, we are ready to put our decades of winning experience to work for you.