Monday, June 17, 2019

Cryptocurrency Mining Company in Texas Ordered To Stop Operation

On November, 6, an Australian Cryptocurrency company, AWS Mining PTY LTD was given an official cease and desist order from the Texas State Board Securities. This is because the company was operating without legal backing and misleading its customers on its mode of operation.

AWS Mining PTY LTD runs a website where it claims that cryptocurrency is being mined on farmlands whose location are in China, Russia, and Paraguay. The website allows potential investors to procure crypto power mining (CMP) contracts with a promise of 200% returns on their investment into the mining operations carried out by the company.

The profit was scheduled as follows: O.1 CMP (valued at $40), 1 CMP (valued at $400), 3 CMP (valued at $1200), 5 CMP (valued at $2000), and 10 CMP (valued at $4000) were to yield a monthly profit of $5.20 BTC, $52 BTC, $156 BTC, $260 BTC, and $520 BTC respectively.

These profits were to be paid to a cryptocurrency wallet known as Mycoindeal, and they were not allowed to be transferred directly to other crypto wallets. Upon withdrawal on the Mycoindeal exchange, investors had to pay a 2% fee of their total withdrawal amount for fiat currency and about 1% fee for digital currencies.

But then, the investors were not aware that AWS Mining PTY LTD also owned the exchange site where their profits were sent. In the same vein, the company refuted that its 200% profit was not a guarantee and customers were aware that potential risks might likely occur.

In their own words,

Past performance is no guarantee of future performance. The output of coins may vary from time to time, based on the Bitcoin protocol’s difficulty adjustments which determines how much computing power miners need to use to solve the subsequent set of blocks and as such, investors should not invest money that they cannot afford to lose

This led to the desist order issued to the company by the security agency of the State who held the notion that its operations could pose dangers to the public. The complaint which was filed against members of the organisation stated that they had issued crypto mining power contracts which have not been registered by “qualification, coordination, or notification” and permission had not been granted for their sale.

The company was also running an affiliate program which paid 10% to referrers for any amount invested by their referrals. According to the security agency, the company’s sales agents as with their referrers were not permitted to offer or sell securities in the state.

Accordingly, the company has 31 days from the day the order was issued to request a hearing before the order becomes a permanent one. On a more serious note, failure to comply could lead to a fine of $5,000 or not more than two years spent in prison, if not both.

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