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Texas Issues Cease And Desist Order To 2 Cryptocurrency Mining Firms

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Texas Securities watchdog took emergency actions against promoters of cryptocurrency mining companies who are aggressively recruiting sales agents through LinkedIn, Facebook, and other online marketing channels.

Texas Securities Commissioner Travis J. Iles issued emergency cease and desist orders to Quebec, Canada-based EXY Crypto, and AWS Mining PTY Ltd., based in Sydney, Australia. Both entities describe themselves as cryptocurrency mining companies.

These two firms and their affiliates, including crypto-mining promoters in the Texas cities of Midland, San Antonio, and Tyler, have been accused of violating the Texas Securities Act as they are not registered with the state's Securities Commissioner.

The companies and individuals named in the orders have 31 days to challenge the findings at the State Office of Administrative Hearings.

The Texas Securities Board ordered these firms to cease and desist from offering for sale any security until the securities and all parties involved are properly registered or exempt from registration.

According to the order, the companies are issuing investment instruments called "crypto mining power contracts". AWS Mining claims it is mining cryptocurrency in computing facilities in China, Russia, and Paraguay.

AWS and its unlicensed sales agents claim that the contracts are "guaranteed to 200 percent return on purchase price," but the order says that AWS Mining is disclaiming the guarantee, instead passing the risks associated with cryptocurrency mining to investors.

Morgan Nolan, the San Antonio-based promotions manager for EXY Crypto, claim investors will earn a weekly return of at least 10 percent.

The Board says the firm's claim that it is a licensed and registered company is false.

"EXY Crypto is intentionally not disclosing material facts about the investment, including the identity of the principals of the company, its place of business, and the costs and fees investors will incur in purchasing an investment in the mining program," according to the cease and desist order.

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