State regulator orders oil company to cease receiving Bitcoin payments

A report by Reuters published on Fox Business said that a securities regulator for Texas has ordered an exploration and production company to cease the receipt of investments for its oil wells in the area in the form of Bitcoins.

On Monday, Balanced Energy LLC and Texas Securities Commissioner John Morgan reportedly entered into an agreement that would see the former take back its original offering of accepting investments in the virtual currency. Morgan had said that the volatile nature of Bitcoin in the market today and coupled with the recent setbacks the Bitcoin industry has received lately had forced the regulator to issue the emergency order.

In a statement, Morgan said, "The price of digital currency is subject to extreme swings, which could affect the amount of money available for business operations."

Dallas-based Balanced Energy has drilled 33 wells in total across 10,500 acres of land located in central Texas. As the first energy company to accept investments in Bitcoins according to the regulator, the company might have banked on the virtual currency's ease of payment transfer and cheap transaction costs to encourage investors to invest into its many oil projects.

According to the emergency order issued by Morgan's office, Balance Energy had been seeking investors to pour money into its two exploration projects. Reuters said the two oil projects were billed at $31,000.

Meanwhile, on Tuesday, the Financial Industry Regulatory Authority (FINRA) stated that the unexpected shutdown and bankruptcy filing of popular virtual currency exchange Mt Gox highlighted the financial risks investors will encounter when they decide to invest in Btcoin. FINRA subsequently released an investor alert which is titled "Bitcoin: More than a Bit Risky." The investor alert, Reuters said, cautions investors about the possibility of losing significant portions of their investments should they decide to put their money on Bitcoin.

Tags

Texas Securities Commissioner John Morgan, Balanced Energy LLC

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