Recently the Texas State Securities Board issued desist order and emergency cases against an Australian crypto mining company and its affiliates.
The Sydney based AWS Mining Pty. Ltd. has mining farms across Russia, China, and Paraguay. The company is offering guaranteed 200 per cent profit on the investment in its mining contracts. The Texas State Securities Board issued emergency cases and desist order against AWS Mining and nine of its affiliates. The order states that
“The investments in the cryptocurrency mining program are ‘securities’ … Respondents are engaged 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.”
According to the orders the company and its affiliates are violating the Securities Act since neither they nor their securities are registered with the Security Commissioner of Texas, so they are ordered to stop the sale of any security in Texas until their securities, and all parties involved are properly registered or exempted from registration. The entities which received the desist order and emergency cases are Automated Web Services Mining (AWS Mining), AWS Elite, Mycoindeal, and West Texas Oilfield Cloud Miners Club.
According to the order, the website of AWS Mining claims that the company is mining cryptocurrencies through its farms located in Ingushetia, Russia; Guangzhou, China; Anhui, China; Hebei, China; and Ciudad del Este, Paraguay. The order claimed 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.’”
To sell their mining contracts and recruit new agents the companies are using multi-level marketing network. The companies are actively running promotional marketing campaigns on social media to attract investors and agents. The board also said that
“They are also telling potential investors the crypto mining power contracts pay a ‘200% passive return on every investment.”
The order further added 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 of representing that investors assume the risks associated with the investment.”
According to the order, the company and their affiliates are also involved in other illegal, deceptive, fraudulent, and misleading practices related to cryptocurrency mining.