On 6 November, the Council for the securities of the state of Texas gave an urgent order to stop the activities of the company cloud mining, who sold unregistered securities.
In the order controller of the securities of Texas says that Automated Web Services Mining (Mining AWS), AWS Mining PTY, purse MyCoinDeal and MLM company AWS Elite violate the securities Law and commit fraud by selling investment contracts.
According to the document, the defendants promised investors a 200% profit from any purchases by selling their contracts to the computing power for mining cryptocurrency, as well as using multilevel marketing.
However, after the signing of the contract with the investors, the company reduced the estimated profits, according to the order.
Texas Governor explained:
“While the potential investors are convinced that will get 200% profit from the basic capital invested in contracts for mining, Mining AWS defendant now disclaims all warranties of profitability, laying the risks for the investors themselves”.
In addition, investors had to use cryptocurrency wallet MyCoinDeal, which was charging a fee for any transaction performed by users. These commissions include the 2% entry Fiat deposits, 2% per cent for withdrawing Fiat deposits, and from 0.5% to 1% for trading cryptocurrencies.
The company is not registered as a dealer or agent for securities; it also did not register the contracts as securities. The order also stated that, in General, the defendants introduced investors astray and basically committed fraud.
The document requires all the defendants to immediately stop the sale of any securities in Texas, as well as “to participate in any fraudulent or other actions that mislead”.
AWS Mining and its affiliated entities are given a month to ensure that they demanded the trial of the indictment, and otherwise the instruction about the termination of activities will be final.