- AWS and its agents allegedly solicited investments from Texas residents without registering with the agency
- The cryptocurrency mining firm’s officials allegedly promised investors a 200 percent passive returns on every investment but also disclaims all guarantees on its website
- AWS and its founders have now been ordered to cease and desist from servicing Texas clients until they get registered with the agency.
In a bid to sanitise its distributed ledger technology and cryptocurrency ecosystem, Texas financial regulators, the Texas State Securities Board has served AWS Mining PTY LTD, an Australia-based cryptocurrency cloud mining startup, with a cease-and-desist order for selling unregistered securities, according to a statement released on November 6.
End of the Road
As stated in the public document released by the Texas State Securities Board, AWS Mining PTY LTD and its agents have been issued a cease and desist order for illegally rending its services to Texas residents and selling unregistered securities.
Per the document, the firm and its many agents claim to offer clients cloud mining contracts that give them a guaranteed 200 percent profit on every purchase.
The regulators have alleged that AWS Mining, its Chief Marketing Officer, Josiah Kostek and other agents have run afoul of its statutes by soliciting investment from Texans without registering under the commission first.
While the firm claims to be a credible cloud bitcoin mining outfit, its mode of operation looks like a typical Ponzi scheme.
On its website, it offers investors an opportunity to join a multi-level marketing matrix for $20 and get the chance of becoming commission earning sales agents.
One interesting fact that makes the entire AWS cloud mining business look like a scam is that the startup wrote a disclaimer on its website, stating categorically that investors must assume the risk that comes with the investment, meanwhile its agents are representing that the crypto mining power contracts give participants a guaranteed 200 percent profit on all contracts purchased.
Relationship With MyCoinDeal
Per the order, investors are required to secure a cryptocurrency wallet with MyCoinDeal to be able to purchase a mining contract as all profits are only paid into the MyCoinDeal wallet.
Participants are required to pay fees to use the wallet to transact in both fiat and cryptocurrency.
AWS failed to give the regulators a proper account of the security measures put in place to guard against theft, hacks and loss of customer funds.
The firm has now been given 31 days to request a hearing with the Texas Securities Commissioner, otherwise, the ruling remains final.
Despite the slump in the price of Bitcoin and other digital assets, cyberpunks keep devising new methods to defraud crypto investors and global financial authorities are proactively hunting down scam bitcoin-linked schemes.
In August Blockchain Reporter reported that the Colorado Securities Commissioner had hammered down several crypto-based businesses in the region for illegal operations.