Crypto Firm Aws Mining Receives Cease And Desist Order From Texas Regulatorbr>
The Texas State Securities Board has issued an emergency cease-and-desist order against an Australia-based cloud mining company for selling unregistered securities.
In its official notice, the regulator said that Aws Mining, its CMO Josiah Koste and eight other respondents affiliated with the company violated the Texas Securities Act for operating without registration and engaging “in frauds.” The company claims to mine cryptocurrency through several crypto farms located in China, Russia, Paraguay.
According to the order, Aws Mining along with its affiliate companies – Aws Elite, and West Texas Oilfield Cloud Miners Club – used social media to promote its crypto mining contract, promising a “200 percent passive return on every investment.” The companies are also using a multi-level marketing network of sales agents to sell these mining contracts and recruit new agents.
“The investments in the cryptocurrency mining program are securities,” the order said. “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.”
While investors are led to believe they will receive a 200% return on principle invested in crypto mining power contracts, the regulator said the company “is now disclaiming the guarantee of profitability and instead representing that investors assume the risks associated with the investment.”
The regulator concluded that the defendants “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.”