Cease and Desist Order on Crypto Mining CompanyNovember 8, 2018
An Australia-based crypto-mining company and their affiliates have issued an emergency “cease and desist order” by the Texas State Securities Board.
The emergency ceases and desists order was based on the contractual clause that “guarantees 200% profit” to their clients.
The order was issued to AWS Mining Pty. Ltd based in Sydney. There are nine other respondents affiliated with the company. They were named in the order as “Automated Web Services Mining (Aws Mining), Elite, Mycoindeal, Aws Mining, and West Texas Oilfield Cloud Miners Club.”
The order has to say that “the investments made in cryptocurrency mining programs are deemed ‘securities.’ Further added that the respondents are engaged in fraud in connection with the offer made for the sale of the securities by making offers and statements which are materially misleading or otherwise likely to deceive the public.”
The board also stated that the Securities Act is being violated as the Securities offered on sale are not registered with the Securities Commissioner. Since they are operating without registering, they are ordered to cease and desist from offering the sale of securities in Texas any further, until the securities on offer and all the parties involved in the process are duly registered.
The order further stated that the company is mining the cryptocurrency by making use of their farms that are located in “Guangzhou, China; Anhui, China; and Hebei, China; Ingushetia, Russia; Ciudad del Este, Paraguay.”
The order further states that the companies and their executives “are issuing investments in cryptocurrency mining referred to as crypto mining power contracts, and they are representing their crypto mining power contracts with a ‘guaranteed 200% profit’ and also they state that each of their crypto mining power contract is guaranteed with a 200% return on the purchase price.”
Also, the companies are making use of the multi-level marketing network of sales agents to sell their mining contracts. The board further emphasized that the process of recruiting new agents on social media to sell these mining contracts is also taking place.
The potential investors are promised a “200% passive return on each of their investment.”
Now that the potential investors are led into believing that they will be getting a 200% return on the principle that they have invested in the crypto mining power contracts, AWS Mining is now disclaiming the profitability guarantee. Instead, they are representing to the investors now to assume that risks are associated with the investment.
The board further stated that the companies and individuals who are named in the order “are engaged in other illegal, fraudulent, deceptive, and misleading practices with respect to the offer of crypto mining power contracts made to Texas residents.”