Australian Cloud Mining Company Receives Cease and Desist Order from Texas Regulator
The Texas State Securities Board has issued a cease and desist order to Australian cloud mining company AWS Mining PTY LTD, with claims that the company engaged in the unlawful selling of unregistered securities. The order specifically states that AWS Mining Chief Marketing Officer Josiah Kosek and many of the company’s agents are in violation of the Texas State Securities Act.
The Texas State Securities Board has issued an over 50 point outline of their complaints against AWS mining. To begin, the Securities Board states that AWS Mining was issuing investments in “crypto mining power contracts” with a “guaranteed to 200 percent return on purchase price.” As you might expect, the guaranteed returns offered to those who purchased contracts were not at any point upheld.
In addition, AWS is accused of pushing customers into joining a multilevel marketing network of sales agents, incentivized through commission bonuses, who are now accused of making illegal, fraudulent, deceptive, and/or misleading practices in connection with the offer of crypto mining power contracts to Texas residents. Sounding much like a ponzi-scheme, evidence of illegal activity on the part of AWS’ marketing force is reported to have been discovered across numerous social media platforms.
The Texas State Securities Board stated that “their conduct threatens immediate and irreparable harm to the public.”
“Although the AWS Mining Website promises the investments are ‘guaranteed to 200 percent profit’ and that each contract is ‘guaranteed to 200 percent return on purchase price’, the AWS Mining Website also disclaims these guarantees of profitability,” the cease and desist order explains.
The order specifically points to sections within the AWS website that state “past performance is no guarantee of future performance” and “[investors] should not invest money that [they] cannot afford to lose.”
Lastly the fine print in the AWS mining power contracts contracts also notes that AWS Mining charges a 20 percent service fee before crediting investors’ accounts with any profits derived from the crypto mining power contracts.
In addition to fraud, AWS is also being accused of a conflict of interests. As part of their mining power contracts, AWS required investors to sign up for MyCoinDeal digital currency wallets. All MyCoinDeal wallet users are required to pay additional fees for accessing the wallet and executing transactions.
What the victims of AWS’ scam didn’t know, however, was that AWS Mining owns MyCoinDeal. In addition to not informing participants of this conflict of interests, AWS also knowingly withheld important security information from wallet users, which left stored holdings susceptible to hacks and malware.
AWS has yet to respond to the order, but has 30 days to request a hearing with the Securities Commissioner before the order is finalized without recourse for an appeal.
Subscribe for the latest cryptocurrency news
More Crypto News
Tether (USDT), the world’s most popular stablecoin, is designed to give users the stability of…
Stellar and its XLM token were first launched in 2014 by Ripple co-founder Jed McCaleb.…
Bitcoin Cash (BCH), the controversial project forked from the original Bitcoin client, is now the…