Texas oil company ordered to stop accepting bitcoin

An oil and gas company has been required by a Texas state securities regulator to stop accepting bitcoins as payment for investments in its Texas oil wells, according to a statement issued by the top watchdog in the Lone Star State.

John Morgan, the Texas Securities Commissioner, filed an emergency order against Balanced Energy, which became the very first energy company in the United States – perhaps the world – to allow investors to pay in bitcoins.

BitcoinThe private firm is reportedly accepting approximately $31,000 for two exploration endeavors. It garnered local headlines after it was discovered that the company appeared at the Texas Bitcoin Conference close to Austin. The small firm has drilled 33 wells on roughly 10,500 acres in the central part of Texas.

“The price of digital currency is subject to extreme swings, which could affect the amount of money available for business operations,” the regulator said in a statement Tuesday. The company has not commented on the order.

In addition to its bitcoin measures, it has also been accused of not warning investors in the potential risks of financing the company’s oil and gas projects. The securities board cited a document that found those who put money into Balance Energy drilling aspirations could receive between 76 and 118 percent within just the first year.

Numerous Texas merchants have hopped on the digital currency bandwagon. An Austin-based bar installed the state’s first bitcoin ATM. However, federal and state regulators have had a difficult time attempting to institute rules and regulations against the virtual currency, but they have been urged to because of bitcoin’s relation to illicit transactions.

“The states are all interested in it,” Paul Snow, president of the Texas Bitcoin Association, told Dallas News. “I have a hard time believing they’re going to come up with a law against transparency and honesty. But they’re probably going to try.”