Nui, Mintage Mining Receive Texas Cease and Desist Order
Texas State Securities Board has taken an emergency action to stop a network of cryptocurrency-related companies from illegally offering securities in the state. A token offering and a mining firm are among those targeted by the securities board as selling fraudulent “cryptocurrency-related investments.” Nui, Mintage Mining Receive Texas Cease and Desist Order and are just two of many who have been on the radar of both state-wide and federal regulatory agencies.
Emergency Action Taken
The Texas State Securities Board announced Thursday that an emergency action has been taken to “target promoters of crypto-mining investments.” According to the notice published on July 12 by the Board, Texas Securities Commissioner, Travis J. Iles took emergency action July 11 to stop a network of companies from fraudulently offering cryptocurrency-related investments to Texas residents.
Utah-based companies Mintage Mining LLC, Symatri LLC, NUI Social, Social Membership Network Holding LLC, and BC Holdings and Investments LLC are named in the emergency cease and desist order. They are all controlled by Darren Olayan who resides in Lehi, Utah. In addition, NUI Social affiliates, Utah-based Douglas Whetsell and Houston-based Wyatt Mccullough, are also named in the order.
Nui, Mintage Mining receive Texas cease and desist order because Mintage Mining LLC allegedly issues and offers two different crypto mining-related investments “illegally and fraudulently.” Together with Symatri LLC, they sell “pre-configured computer hardware to mine Kala,” an ERC-20 token which Symatri claims to be “fungible and transferable, and it is expected to be traded on cryptocurrency exchanges in the near future.”
Symatri also claims that more than 13,000 users have signed up for Kala’s ICO, which sold more than 814 million tokens. It supposedly raised over $8.5 million and more than 800 BTC.
According to the commissioner, Symatri has not disclosed material information about the value of its cryptocurrency, Kala, nor is it providing disclaimers about the risks of investing in computer hardware used to mine Kala.
NUI Social is a multi-level marketing company that claims to have more than 300,000 members in 140 countries. Members of the company recruit individuals for cryptocurrency investments and earn commissions for the people they recruit.
Whetsell and Mccullough were named for publishing “advertisements targeting Texas residents,” the commissioner explained. According to the document, the promoters made claims such as:
- The average weekly rate of interest varies from three percent to seven percent and the annual rate of interest ranges from 180 percent to 250 percent.
- The advertisements also represent that Mccullough’s investment grew 500% within 7 weeks while his uncle’s rose 4,000% in 10 weeks.
The order “alleges widespread violations of the Texas Securities Act” by all of the entities and individuals named. According to the commissioner,
none of the persons offering any of the 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 commissioner elaborated even further by stating that the violations include making deceptive claims to the public.
Olayan and Mintage Mining, communicated to their investors that Mintage is ‘in compliance’ with securities laws, ‘works to always stay ahead of cryptocurrency regulation,’ and ‘remain (sic) so continually by keeping in contact with legal firms.’
All named parties have been ordered to immediately cease and desist from offering a security for sale in Texas until the security is registered or exempt. They must also cease acting as securities dealers or agents in the state until they are registered or exempt. They have likewise been told that they cannot engage in any security-related fraud in the state.
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