Authorities in Texas have shut down a cloud mining farm, for offering unregistered securities.
The Texas State Securities Board (TSSB), filed an emergency cease and desist order on April 8, against the firm, Ultra BTC Mining.
According to the order, Ultra stands accused of several offences including fraud, failure to register, repeatedly false statements and also its decision to withhold important information about its business.
Reportedly, Ultra Mining and Laura Branch, the company’s agent, were offering an option for investors, claiming they will receive more than 100% returns. A TSSB media release said:
“The company is promising eye-opening returns. According to the order, they are telling potential investors that a $10,000 investment in computing power will return nearly $10,500 per year. A $50,000 investment will return nearly $52,000 per year.”
The TSSB further says that the company claimed to help coronavirus efforts with $100,000 but did not verify the “fraudulent” claim.
The Board also says that even though Ultra did not register the offering, the company says it has pulled up to $18 million from Texans.
The action follows similar ones from the United States Securities and Exchange Commission (SEC). The SEC has bitten down on several similar projects that have failed to follow stipulated rules including a recent settlement with blockchain company Enigma MPC.
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