An Australian registered cloud mining firm has been issued a cease and desist order by regulators in Texas. The company had been marketing its products in the state and selling cloud mining contracts. However, in Texas crypto mining power contracts are not yet qualified to be sold – meaning that the company was violating securities laws in the state.
AWS Mining PTY LTD (AWS) – the Australian based cloud mining firm – promised investors a 200% guaranteed return on their investments, but after the cease and desist order landed, AWS quickly changed the wording on its website.
Failing to Disclose Key Information
Aside from illegally selling cloud mining power contracts in Texas, ASW also doesn’t outline some very key information that investors would typically require. This includes the type of hardware being used to mine, how powerful the hardware is, average power cost to consumption ratio, power backup methods for power outages, the security of its premises, and the qualifications of the people running the business. Most cloud mining firms around the globe disclose this information as it’s required by a number of jurisdictions. Those that choose not to disclose the information typically geo-block certain IPs to prevent issues like this occurring.
Beginning to Feel Like a Scam
The more digging you do into AWS, the more it begins to look like a scam. To start with, people are encouraged to persuade others to invest in AWS’s crypto mining power. In return, they will be given a reward, and this reward increases proportionately with the amount of people they bring to the firm – very similar to a Ponzi scheme.
On top of this, the AWS Facebook page is littered with posts that are reminiscent of a cult – not to mention the irritating way it has used capitalization. From the Facebook page, you are directed to a second website – where’s the time. It looks like it was built in the 90’s and is littered with red flags – more red flags than the Maltese Scudo project. If this isn’t enough to put you off sending them your hard-earned money, then we don’t know what else will persuade you to stay away.
Scams and Cults Posing as Genuine Projects
Scammers and cultists are looking to take advantage of the impressive gains the crypto market can provide investors with. While the market has been rather bearish so far this year, many people who have little understanding of the crypto market have bought positions in the hope of instant riches. These people typically have done little research and the promise of 200% guaranteed gains will fool a lot of people.
Another questionable project doing the rounds at the moment is Initiative Q – we are very sure that you have seen this on your social media channels. While Initiative Q isn’t actually promising much, it’s making a lot of bold claims, but as no money is changing hands we aren’t going to brand it as a scam. If something sounds too good to be true, it usually is – so please be careful.
AWS has 29 days left to resolve its case with the regulators in Texas. It can contest the decision and make amendments, or simply risk a $5,000 fine with the named individuals facing up to two years behind bars. Given the incredible heat in Texas during the summer, it’s probably for the best that AWS tries to clear this up with the regulators and geo-blocks jurisdictions with securities regulations.