CONCORD, NH – The New Hampshire Bureau of Securities Regulation, under Secretary of State David M. Scanlan, has issued an Order to Cease and Desist against Finstate Investment LLC. The order alleges that Finstate is defrauding investors through a fraudulent cryptocurrency investment website that solicits funds and displays fictitious account activity, misrepresenting fact and making an illegal guarantee against risk of loss.
A retired New Hampshire resident was initially prompted by an individual on Facebook to send cryptocurrency to fund an account on Finstate.
After investing approximately $3,526 worth of cryptocurrency, the investor was able to log into an “account” on Finstate’s website, which purportedly showed deposits, credits, total profit, and an account balance.
The investor was told Finstate would do all the work and return the proceeds on April 20, 2024, after taking a 15% commission. The investor watched their Finstate account grow to a total value of $60,762 on April 11, 2024. As of the date the petition was filed, the investor had not received any payment from Finstate and has been unable to withdraw from their Finstate account.
In its petition, the Bureau alleges that Finstate’s website “constituted a device, scheme or artifice” to defraud investors. The Bureau alleges that the investor’s funds were sent to Binance, a cryptocurrency exchange not available to U.S. investors, and never traded on the investor’s behalf while Finstate continued to show fictitious account activity.
The Bureau also alleges that Finstate’s website contained an unlawful guarantee against risk of loss via a purported “insurance policy” that stated the policy “holds the company [Finstate] accountable to bear any loss during your trading sessions.”
The Bureau has requested an immediate cease and desist from the fraudulent conduct and a permanent bar from securities business in the State of New Hampshire. The Bureau is also seeking restitution of any losses incurred because of the unlawful actions, as well as the imposition of fines and costs.
The Bureau has observed a marked increase in the use of social media platforms to facilitate fraudulent schemes. The Bureau, through its Investor Education program, urges investors to properly identify contacts and carefully vet solicitations on social media to invest.
Anyone who has invested through Finstate can contact the New Hampshire Bureau of Securities Regulation with questions or concerns.
The order issued pursuant to the Bureau’s petition provides Finstate with the right to contest the Bureau’s allegations at an administrative hearing.