The Attorney General of South Carolina has executed a cease and desist order in Genesis Mining. In documents filed with his securities commissioner, I have stated that there were no restrictions on the value of the state of Palmetto.
Attorney General forecasts dark clouds for mining contracts
Mining contracts in the cloud allow individuals to buy dispersal power without the need to get their hands dirty. Instead of having to ask, install and maintain a group of miners, the capacity can be purchased in a data center configured for mine cryptography. Genesis Mining is one of the most well established operators in space. I have, like companies like Hashflare, have been practicing their trade for years. Now, it seems that a cease and desist order will be put in end to that, at least in the state of South Carolina.
"Join more than 1, 000,000 people with the world's leading human resources provider," proclaims the Genesis website. "It's super simple: your mining platforms are already installed and functioning." The company operates a data center in Reykjavik, Iceland. But in a presentation dated March 9, the South Carolina Attorney General's Office ordered Genesis Mining and Swiss Gold Global to stop targeting residents in the state.
The company that lives in the cloud
Like many web companies, Genesis is everywhere and nowhere. The administrative procedure document addressed to the South Carolina Securities Commissioner lists the last known Genesis address as Chinachem Century Tower in Hong Kong. This appears to be a common registration address for companies and appears in the offshore database that publishes the results of the Panama documents. Under a section titled Findings of Fact, the Attorney General's presentation reads:
Genesis Mining offers mining contracts for six cryptocurrencies: Bitcoin, Dash, Ethereum, Litecoin, Monero and Zcash, each of which entitles an investor to ... a "Mining Contract" ... in exchange for investing in a Mining Contract, the defender Genesis Mining involves a certain amount of computational effort on behalf of the investors.
An order to stop and close
The reason why the Attorney General files the cease and desist is evident: "Genesis Mining continuously offered investment opportunities in mining contracts to residents of South Carolina through its website." It seems that Swiss Gold Global sold the contracts on behalf of Genesis, but was not registered as a broker in South Carolina. This is illegal, says the lawsuit, because "investment contracts constitute securities, and an investment contract includes an investment in a joint venture with the expectation of profits."
US residents They are tired of hearing that each offer of cryptography they touch a guarantee. From ICO tokens to mining contracts, it seems that most investments have the potential to be interpreted as a safe value given that they are purchased with the expectation of future profits. However, the Attorney General seems to have a prima facie case here, and Genesis Mining, if you answered the claim, could have his work cut off. Genesis is more likely to focus its efforts elsewhere, since the loss of a state of EE. UU It has no consequences. But if other states follow suit, it could signal the beginning of the end of cloud mining contracts in the US. UU
For mining companies that seek to avoid having to register with the SEC, which is probably the majority of them, the most intelligent approach may be to avoid US investors altogether. Moonlite, a capital-raising project to build mining data centers in Iceland, is already taking that position; US investors UU They can not participate in their sale of tokens. Mining companies that seek investment, either through cloud or tokenization contracts, may find that their safest option is to completely bypass the US states. UU