Texas Is Ordering a Southlake Oil Company to Stop Taking Investments in Bitcoin

Categories: Biz

You can buy anything with Bitcoin (pictured above) these days: A sandwich; art; insurance. And, until yesterday, at least, you could also buy shares in Texas oil wells.

The oil well shares were offered by a Southlake company called Balanced Energy, which, according to its website, is currently offering a couple prospects in Runnels County near San Angelo. Typically, investors buy interests using U.S. dollars. But at the Texas Bitcoin Conference in Austin last week, Balanced Energy president Kirk Johnson apparently told attendees that he also accepts the popular crypto-currency.

See also: A Federal Judge in McKinney Man's Digital Ponzi Case Rules that Bitcoin Is Real Money

The state of Texas is not pleased. On Monday, Texas Securities Commissioner John Morgan sent Johnson and Balanced Energy an emergency cease-and-desist letter telling him to stop.

Morgan's complaint isn't just that Balanced Energy is accepting Bitcoin. It's that he's recruiting non-accredited investors, saying things like "we don't do any verification" and "we're not going to play paperwork police," and "intentionally failing to disclose any material facts relating to the nature of the risks associated with the investment."

Those risks he's not mentioning include the uncertainty associated with Bitcoin, whose price fluctuations "may affect business operations," so, for the sake of headlines and agency press releases, it's Bitcoin.

Bloomberg reports this may be the first Bitcoin-related cease-and-desist order issued by a state securities commissioner, which is something to be proud of?

Send your story tips to the author, Eric Nicholson.

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10 comments
Sotiredofitall
Sotiredofitall topcommenter

Complements on the article's graphic - could also be used to illustrate the Fed's monetary policy

Sharon_Moreanus
Sharon_Moreanus topcommenter

My Monopoly money has always been good to me over the years.

ozonelarryb
ozonelarryb

And Texas banned Tesla. Along with those Democrat commies in New Jersey, and hicks in Arkansas. So much for bidness friendly.

mcdallas
mcdallas

For a second there, I thought I was reading Gizmodo...

JohnJay24
JohnJay24

If Bitcoiin is imaginary money, imagine me the difference between a $1 bill and a $100 dollar bill? Is it the paper? Is it the ink? What makes $100 more than $1 other than someone says so. 

We all have imaginary money. The banks like it that way, that way they can print it without having to worry about backing it up. 
To be honest, bitcoin actually has a more solid base than the $, it's just that the $ is backed by military force if necessary. 

WhiteWhale
WhiteWhale

It is an unregulated virtual currency, what could go wrong with that?

dingo
dingo

@ozonelarryb  

Business friendly it is in the sense that appropriate risks are communicated to the investor. Oil investment deals are regulated in order to promote, not hinder investment in energy production. 


If the industry was not regulated in that sense then the unseen risks would hinder investment.


Also, the state does not consider the 'taking investments in bitcoin' as a significant additional risk. It is more concerned with the 'holding investments in bitcoin' aspect due to its highly speculative nature.

ScottsMerkin
ScottsMerkin topcommenter

@ozonelarryb  Tesla isnt banned in Texas, they just have to use a dealer to sell their cars here, just like every other car maker.  (yes I know that sucks)

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