Texas State Securities Board, a Texas state agency responsible for administering and enforcing the Texas Securities Act has taken an emergency action against two crypto mining companies based in Canada and Australia for promising unrealistic returns.
The two firms are AWS Mining and EXY Crypto. The board has issued an emergency cease-and-desist order for the illegal promotion of sham crypto mining investment deals.
Texas State Securities Board And AWS Mining
The board on Tuesday issued an emergency cease and desist order to Sydney-based Aws Mining Pty. Ltd. and other affiliated with the companies. These are Automated Web Services Mining (Aws Mining), Mycoindeal, Aws Elite, and West Texas Oilfield Cloud Miners Club. According to the order, the company is mining cryptocurrency through farms founded in Guangzhou, China; Ingushetia, Russia; Ciudad del Este, Paraguay; Anhui, China; and Hebei, China.
As per the document, AWS Mining and its agents and Chief Marketing Officer Josiah Kostek have broken the Texas Securities Act by tempting investors in buying AWS’ unregistered cloud mining power contracts and ensuring a 200% passive return on every investment. The company’s website also proposes investors to secure a multi-level marketing matrix for $20.
The firm asked investors to secure a cryptocurrency wallet given by MyCoinDeal to join AWS’ crypto mining program. In this program, the wallet developers asked investors to pay expenses for deployment of their wallets and handling transactions within it.
According to the order, AWS deliberately declined to reveal that AWS Mining PTY is the business name possessor of MyCoinDeal. AWS also purportedly delayed data about its methods for saving cryptocurrencies, and its medians of accounting and executing security etiquettes for client security from malicious assaults.
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 further described that respondents are breaking the Securities Act because 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 security is registered with the securities commissioner.
Texas State Securities Board And EXY Crypto
The board on Tuesday also issued an emergency cease and desist order to Canada-based firm EXY Crypto. The company used the famous social media platform LinkedIn, to reach its potential victims. the Texas Securities Board further stated that Morgan Nolan, a San Antonio-based promotions manager for EXY Crypto, is giving the investments by using LinkedIn. A strategy director for EXY Crypto, Melissa Spring, pretends to exist in Tyler and is also giving the investments by using LinkedIn.
The Texas State Securities Board also stated that the Promotion Manager of the company, Nolan has utilized the name of the authority’s Director of Enforcement, Joe Rotunda to assure victims about the investment in their company. The company also recruited investors who were not registered as dealers or agents to offer the investments issued by respondents EXY Crypto in Texas.
The board further described that respondents are breaking the Securities Act because 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 security is registered with the securities commissioner.
This is not the first time that Texas State Securities Board has taken actions against crypto firms. In the month of February 2018, the board had issued an emergency cease-and-desist order against four companies named R2B Coin, a Hong Kong-based company, BitConnect, a United Kingdom-based company, USI-Tech, a Dubai-based company, and DavorCoin.
According to the report, which was signed on Feb 3rd, DavorCoin was violating sections of the Texas Securities Act by offering unregistered securities for sale and misleading the public in an attempt to lure unsuspecting investors. DavorCoin boasted an interest rate of up to 48% every month while Bitconnect promised to give its investors an interest rate of 1% daily.
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