AMS Mining PTY LTD, an Australia-based cloud mining company, has received an emergency cease and desist order from The Texas State Securities Board. AMS has been issued a cease and desist for encouraging people in Texas to purchase their unregistered cloud mining power and promising them a “200 percent passive return on every investment.”
The issue is multi-faceted; firstly crypto mining power contracts have not been qualified for sale in Texas, and secondly, they promised returns that were unrealistic and didn’t materialize. Their response to these inflated promises was that investors should know there is an inherent risk with these operations. This could be seen as dishonest behavior since the language AMS chose to use did fill customers with promises of financial success, to push the blame onto their stung customer base seems unfair.
AMS allegedly asked their investors to open a digital currency wallet with MyCoinDeal in order to participate in the scheme. They then had to pay fees for wallet transactions and set up. The company were allegedly untransparent in their backgrounds, the fact that AMS Mining PTY is the name holder of MyCoinDdeal and also how they were conduction their cryptocurrency operations.
AMS has been given 31 days to request a hearing on the charges, if they chose not to, the emergency cease and desist will become a final cease and desist.
This isn’t the first time cryptocurrency companies have come under scrutiny from The Texas State Securities board, they have previously issued cease and desists to fraudulent crypto schemes.
Cryptocurrency businesses are often seen as a high potential venture for budding entrepreneurs, and its certainly easier to set up a crypto-based company than a traditional financial trading company in a market already saturated with options as well stringent regulations. However, the danger is that uneducated individuals set up businesses that often result in a loss for its customers and for themselves, sometimes this loss is not only financial but also leave a mark on their criminal record. To protect yourself from getting caught up in unsuccessful crypto ventures, do your research on companies, check they are registered and legitimate, and be wary of inflated or too good to be true promises of grandeur.
The road to a safe and secured crypto world is paved with a few potholes, but in the end, it makes for a promising and viable financial future.