Texan authorities take emergency action against cryptocurrency mining promoters

FinanceFeeds –

The wave of action against cryptocurrency-related scams in Texas continues. Texas Securities Commissioner Travis J. Iles took emergency action on July 11, 2018, to stop a network of companies from fraudulently offering cryptocurrency investments to Texas residents.

The Emergency Cease and Desist Order names three companies:

  • Mintage Mining LLC. The commissioner says this entity is illegally and fraudulently issuing and offering two different investments in the mining of cryptocurrencies;
  • Symatri LLC. This entity claims to have issued a new cryptocurrency called Kala and, together with Mintage Mining, is offering investors the opportunity to own and possess pre-configured computer hardware to mine Kala;
  • NUI Social. This is a multi-level marketing company that purports to have more than 300,000 members in 140 countries (yeah, right – Ed.) NUI recruits individuals for the cryptocurrency investments, with some of its “members” eligible to earn commissions for the people they recruit – a typical sign of a Ponzi scheme.

All of the companies named in the Order are controlled by Darren Olayan of Lehi, Utah, and are based in Utah.

The order also names Wyatt McCullough, who is affiliated with NUI Social. He and a third individual named in the order, William Douglas Whetsell, are publishing advertisements targeting Texas residents. The advertisements assert that Mintage can generate extraordinarily high returns – up to 250% a year – via cryptocurrency mining.

The order alleges numerous violations of the Texas Securities Act by all the entities and individuals mentioned in the document.

The violations include making deceptive claims to the public. Olayan and Mintage Mining, for example, are telling investors that Mintage is “in compliance” with securities laws, “works to always stay ahead of cryptocurrency regulation,” and “remains so continually by keeping in contact with legal firms.” Furthermore, Symatri is not disclosing material information about the value of its cryptocurrency Kala. Nor is it providing information about the risks of investments in the computer hardware used to mine Kala.

The regulator notes that none of the persons offering any of the above-mentioned investments are registered to sell securities in Texas, nor are the investments themselves registered for sale or have qualified for an exemption from registration.

The Texan regulator had taken action against cryptocurrency scams earlier this year. In February, for instance, it issued an emergency cease and desist order against LeadInvest, an entity that purports to be “a technology company that specializes in the development of trading software in the Forex market and the Bitcoin currency”. The Texan watchdog was also among the participants in “Operation Cryptosweep” which resulted in nearly 70 inquiries and investigations and 35 pending or completed enforcement actions related to ICOs or cryptocurrencies during the month of May.

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