On Aug 7, 2019, the Texas State Securities Board (SSB) ordered Automated Web Services (AWS) mining, an Australian crypto mining firm, to refund its investors. This is after AWS violated the law by offering CMP contracts without registration and making false statements that deceived investors.
The contracts were initially sold for $400, with investors promised a guaranteed 200% return on their purchases. AWS told investors to use the wallet issued by the company to participate in all CMP-related contracts, promising daily returns in Bitcoin.

However, AWS later changed its tune to claim that users would have to take up the risks of cryptocurrency volatility and price fluctuations. The 'crypto investor' also charged investors inflated fees, including 2% on all fiat deposits and withdrawals, and 0.5 to 1% for all cryptocurrency-related transactions.

This led to the SSB suspending all AWS securities offerings in Texas from November last year. According to the Aug 7th order, the company will now be forced to repay all 19 Texas-based investors entirely of their lost investments.
<h2>How the scheme was carried out</h2>
AWS allegedly recruited sales agents via social media platforms such as LinkedIn and Facebook to develop an illegal multi-level marketing system that was used to lure potential investors. A Pennsylvania-based AWS subsidiary ran the entire system.

According to the latest <a href="https://www.cryptoknowmics.com/crypto/btc-hits-4800-for-the-first-time-in-2019-top-crypto-markets-see-double-digit-growth/">SSB report</a>, the hired sales agents attempted to defraud Texas residents using "work from home" forums, promising investors lucrative returns from trading cryptocurrencies. They also offered investors high incomes through Bitcoin mining.
<h2>Previous action against crypto-related investments</h2>
The SSB had previously issued an emergency<a href="https://www.ssb.texas.gov/sites/default/files/ENF-18-CDO-1765.pdf"> cease and desist order</a> to a network of cryptocurrency-related firms in a bid to protect state investors from fraudulent crypto investments.

SSB commissioner, Travis J. Iles, took action on July 11, 2019, ordering all implicated companies to stop offering securities in Texas until the security is registered or exempt.

The order cited gross violations of the Texas Securities Act, stating that the banned companies made deceptive claims to investors, such as promising inflated returns of up to 200 % per annum and claiming that the companies offer investments in compliance with Texas securities laws.

Mintage Mining LLC, the first company accused of defrauding investors in that order, was noted to have been offering illegal and fraudulent investments in cryptocurrency mining. Another implicated company named 'Symatri' was alleged to have been fraudulently issuing a newly launched coin dubbed 'Kala' and offering investors a chance to obtain Kala-mining equipment.

The SSB has since been vigilant in<a href="https://www.ssb.texas.gov/sites/default/files/TINT%20X_ENF_19_CDO_1781.pdf"> cracking down</a> on illegal crypto-related firms, carrying out investigations that have led to approximately 40 unresolved or completed enforcement actions.

They had also released a<a href="https://www.ssb.texas.gov/news-publications/mid-year-enforcement-highlights-crypto-scams-oilfield-fraud-millions-stolen"> report</a> in July 2018, containing protection for investors from fraudulent cryptocurrency-related investment products.

Texas Securities Board Orders Fraudulent Mining Promoters to Refund Investors

Am Wayne, a Blockchain enthusiast and expert in crypto trading. Currently, I cover trendy issues on digital currencies.

Texas Securities Board Orders Fraudulent Mining Promoters to Refund Investors

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