Texan authorities take emergency action against cryptocurrency mining promoters

Maria Nikolova

The regulatory action targets a network of companies, including Mintage Mining LLC, Symatri LLC and NUI Social, which offered cryptocurrency-related investments to Texas residents.

The wave of action against cryptocurrency-related scams in Texas continues. Texas Securities Commissioner Travis J. Iles took emergency action on July 11, 2018, to stop a network of companies from fraudulently offering cryptocurrency investments to Texas residents.

The Emergency Cease and Desist Order names three companies:

  • Mintage Mining LLC. The commissioner says this entity is illegally and fraudulently issuing and offering two different investments in the mining of cryptocurrencies;
  • Symatri LLC. This entity claims to have issued a new cryptocurrency called Kala and, together with Mintage Mining, is offering investors the opportunity to own and possess pre-configured computer hardware to mine Kala;
  • NUI Social. This is a multi-level marketing company that purports to have more than 300,000 members in 140 countries (yeah, right – Ed.) NUI recruits individuals for the cryptocurrency investments, with some of its “members” eligible to earn commissions for the people they recruit – a typical sign of a Ponzi scheme.

All of the companies named in the Order are controlled by Darren Olayan of Lehi, Utah, and are based in Utah.

The order also names Wyatt McCullough, who is affiliated with NUI Social. He and a third individual named in the order, William Douglas Whetsell, are publishing advertisements targeting Texas residents. The advertisements assert that Mintage can generate extraordinarily high returns – up to 250% a year – via cryptocurrency mining.

The order alleges numerous violations of the Texas Securities Act by all the entities and individuals mentioned in the document.

The violations include making deceptive claims to the public. Olayan and Mintage Mining, for example, are telling investors that Mintage is “in compliance” with securities laws, “works to always stay ahead of cryptocurrency regulation,” and “remains so continually by keeping in contact with legal firms.” Furthermore, Symatri is not disclosing material information about the value of its cryptocurrency Kala. Nor is it providing information about the risks of investments in the computer hardware used to mine Kala.

The regulator notes that none of the persons offering any of the above-mentioned investments are registered to sell securities in Texas, nor are the investments themselves registered for sale or have qualified for an exemption from registration.

The Texan regulator had taken action against cryptocurrency scams earlier this year. In February, for instance, it issued an emergency cease and desist order against LeadInvest, an entity that purports to be “a technology company that specializes in the development of trading software in the Forex market and the Bitcoin currency”. The Texan watchdog was also among the participants in “Operation Cryptosweep” which resulted in nearly 70 inquiries and investigations and 35 pending or completed enforcement actions related to ICOs or cryptocurrencies during the month of May.

Read this next

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

Industry News

HollyWally opens office in Portugal to bring B2B2C wallet-as-a-service platform to Europe

“We looked at a number of centers for startups throughout Europe and were attracted straight away to Lisbon. There is great Government support and enthusiasm for startups, it’s well positioned between our Asian and US offices, it’s a cost-effective city in which to base a fintech and it’s a beautiful place.”

Retail FX

Eightcap integrates Acuity’s economic calendar for trade ideas on MT4 or MT5

“By incorporating Acuity’s cutting-edge AI technology into our platform, we are able to offer our clients a powerful new tool that will help them stay ahead of the markets. We are committed to providing an extensive range of tools and educational resources that will enhance our clients’ trading experience and allow them to trade smarter.”

Inside View

Private Equity Renaissance

Recent years have seen a resurgence in the concept of trading physical equities, with a slew of new arrivals joining the market for what is arguably one of the oldest forms of investing. But what has been the driving force behind this change in momentum?

Digital Assets

Dubai introduces new crypto regulations with fines of up to $135,000

Against the backdrop of a crashing market and burned investors, Dubai has sealed a landmark rulebook that governs how the Emirate will regulate cryptocurrency activities.

Institutional FX

FX volume drops 16pct at Russia’s largest exchange in January

The Moscow Exchange, Russia’s largest exchange group, released its monthly batch of trading volumes and metrics for January 2023 – the latest readings showed a pullback across the board for multiple segments, namely in the FX, given lower volatility and a reduced trading schedule.

Institutional FX

Standard Chartered sets up wholly-owned brokerage arm in China

UK-headquartered bank Standard Chartered said its Hong Kong arm has been granted an in-principle approval for a brokerage license from the China Securities Regulatory Commission (CSRC).

Digital Assets

Revolut offers staking for Ether, Cardano, Polkadot, and Tezo

British fintech and banking firm Revolut has introduced crypto staking — a practice of earning rewards for serving as a transaction validator in the Ethereum blockchain – to its UK and European Economic Area (EEA) customers.

<