State Securities Board of Texas has issued an emergency cease and desist order to AWS Mining PTY LTD for selling unregistered securities, as per an official notice filed Nov. 6. It is to be noted that AWS Mining is an Australia-based cloud mining company.
According to the document, AWS Mining along with its Chief Marketing Officer Josiah Kostek and multiple agents have violated the Texas Securities Act by enticing the residents of the state in purchasing AWS’ unregistered cloud mining power contracts and promising a “200 percent passive return on every investment.” The company’s website also reportedly offers investors to join a multi-level marketing matrix for $20, after which they could earn commissions by operating as sales agents.
AWS Mining purportedly shuffled off its allegiance to pay out the promised profit, stating that all the risks associated with the investment lie with the investors. AWS failed to register as a securities broker-dealer. Moreover, cryptocurrency mining power contracts are neither registered nor qualified for sale in Texas.
The firm purportedly required investors to secure a digital currency wallet provided by MyCoinDeal to participate in AWS’ crypto mining program, wherein the wallet developers required investors to pay fees for deployment of their wallets and conduct transactions within it.
According to the order, the defendants intentionally failed to divulge that AWS Mining is the business name holder of MyCoinDeal. Moreover, AWS mining reportedly withheld information about its methodology for storing various cryptocurrencies, and its means of accounting and administering security protocols for protecting customers from malicious attacks.
The defendants purportedly did not disclose their business data and qualifications. For instance, their background in selling securities to investors and dealing with cryptocurrencies was not disclosed. Moreover, they didn’t disclose the commissions they would receive for selling cryptocurrency mining power contracts.
AWS Mining now has 31 days to request a hearing with the Securities Commissioner. After that, the order will become final and non-appealable.
The Texas State Securities Board earlier issued an emergency cease and desist order to a network of crypto-related firms, which purportedly offered fraudulent cryptocurrency investments to numerous residents of the state. The companies, without further ado, were suspended from offering securities in Texas until the security is registered or exempt, as per the order.