Regulation
The Texas State Securities Board has issued an emergency cease and desist order to an Australia-based cryptocurrency mining company and its affiliates. According to the order, the company represents that investments in its mining contracts are “guaranteed to 200% profit.”
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Cease and Desist Order
The Texas State Securities Board on Tuesday issued an emergency cease and desist order to Sydney-based Aws Mining Pty. Ltd. and nine other respondents affiliated with the company. The entities named are Automated Web Services Mining (Aws Mining), Mycoindeal, Aws Elite, and West Texas Oilfield Cloud Miners Club.
Sydney-based Mycoindeal provides wallet services for investments issued by Aws Mining. Aws Elite is a multi-level marketing organization for Aws Mining based in Pennsylvania. West Texas Oilfield Cloud Miners Club, an affiliate of Aws Elite, is a Texas-based sales agent for Aws Mining.
The order states:
The investments in the cryptocurrency mining program are ‘securities’ … Respondents are engaging in fraud in connection with the offer for sale of securities … [and]are making offers containing statements that are materially misleading or otherwise likely to deceive the public.
The board elaborated that respondents are violating the Securities Act since neither they nor their securities are registered with the state’s Securities Commissioner.
They are, therefore, ordered to cease and desist from offering for sale any security in Texas until the securities and all parties involved are properly registered or exempt from registration.
200 Percent Return Guaranteed
According to the order, Aws Mining’s website claims that the company is mining cryptocurrency through farms located in Guangzhou, China; Ingushetia, Russia; Ciudad del Este, Paraguay; Anhui, China; and Hebei, China.
The order describes that the companies and their executives “are issuing investments in cryptocurrency mining referred to as crypto mining power contracts, and they are representing [that]the crypto mining power contracts are ‘guaranteed to 200% profit’ and that each crypto mining power contract ‘is guaranteed to 200% return on purchase price.’”
In addition, the companies are using a multi-level marketing network of sales agents to sell these mining contracts and recruit new agents on social media. The board emphasized:
They are also telling potential investors the crypto mining power contracts pay a ‘200% passive return on every investment.’
Furthermore, the order noted that “Although potential investors are led to believe they will receive a 200% return on principle invested in crypto mining power contracts,” Aws Mining “is now disclaiming the guarantee of profitability and instead representing that investors assume the risks associated with the investment.”
The board subsequently concluded that the companies and individuals named in the order “are engaging in other illegal, fraudulent, deceptive, and/or misleading practices in connection with the offer of crypto mining power contracts to Texas residents.”
What do you think of Texas taking action against Aws Mining? Let us know in the comments section below.
Images courtesy of Shutterstock and Texas State Securities Board.
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