Texas Securities Commissioner orders cryptocurrency mining firm to repay investors
AWS Mining, aka MyCoinDeal, has agreed to settle the case brought by the Texan authorities through the entry of an order which stipulates the respondents have to provide refunds to investors.
An Australian company that promised returns of up to 200% on investments in cryptocurrency mining has agreed to refund money to Texas investors and has admitted it illegally sold unregistered securities.
Under the Order entered August 2, 2019, by Texas Securities Commissioner Travis J. Iles, AWS Mining PTY, based in Sydney, Australia, is paying 19 Texas residents the full amount of their investment minus any profits they received.
AWS Mining operates as AWS Mining and MyCoinDeal. The latter provides digital wallet services for cryptocurrency investments issued by AWS Mining.
The Texas Securities Commissioner took emergency action against the AWS companies in November 2018. Back then, the authorities determined that the AWS companies were illegally recruiting sales agents through LinkedIn, Facebook, and other online marketing channels.
AWS Mining claimed it was mining cryptocurrency in computing facilities in China, Russia, and Paraguay. According to the initial order, AWS claimed the contracts are “guaranteed to 200% return on purchase price.”
Although investors were told they would receive a 200% return on the purchase of the contacts, AWS Mining also disclaimed the guarantee. The company said investors would bear the risks of mining cryptocurrency, which include volatility in the price of cryptocurrencies, system or technical failures, and changes in the cost of electricity used to power and cool hardware.
According to the emergency action, AWS Mining used a multilevel marketing network of sales agents to sell the mining power contracts and paid as many as six different types of bonuses and commissions to these sales agents.
The Texan authorities have been very active in combatting fraud related to cryptocurrencies. In June this year, Texas Securities Commissioner Travis J. Iles entered three emergency cease and desist orders against promoters of fraudulent cryptocurrency-related investments who are soliciting Texas residents through Facebook “work from home” forums.