With the first ever Bitcoin-related intervention by a state securities regulator, Texas officials this week issued an emergency cease and desist order against an oil and gas exploration company that accepted the virtual currency from investors.
Balanced Energy, located in a Dallas-Fort Worth suburb, and its president, Kirk Johnson, solicited investments at the Texas Bitcoin Conference, held earlier this month, according to Texas Securities Commissioner John Morgan. The company advertised working interests in wells at the conference, and through social media and a web page, and those investments were accepted using Bitcoin. The company planned to convert virtual currency payments to traditional currency and use the money to pay for business operations, but failed to disclose the risks of using Bitcoin for these investments, among them the likelihood of extreme price swings. The order required the company and its principals to stop selling unregistered securities
