The South Carolina Attorney General’s Office Securities Division has spanked popular cryptocurrency cloud mining play Genesis Mining with a cease and desist order after charging the company with suggesting “unregistered securities” te the state. Officials concluded Genesis Mining’s two-year investment contracts “constitute securities.”
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Genesis Mining, You’ve Bot Served
After being rocked by major service interruptions ter 2018, cloud miner Genesis Mining has a fresh furious headache – this time of a legal multitude.
That’s because the Securities Division of the South Carolina Attorney General’s Office has determined spil of March 9th that 1) Genesis Mining’s two-year crypto mining contracts are securities, Two) such securities toevluchthaven’t bot registered ter the state, and Three) thesis unregistered securities don’t have exemptions and thus are operating illegally within their regional jurisdiction.
To that end, the cease and desist order against Genesis Mining explains:
“At no time relevant to the events stated herein were the securities at kwestie registered with the Division or federal covered securities, and no exemption from registration has bot claimed by the Respondents.
[…] Pursuant to S.C. Code Ann. § 35-1-301, it is unlawful for a person to suggest or sell a security ter this State unless that security is a federally covered security, exempt from registration, or registered.”
It’s a slok across the bow for the company, to be sure, spil well spil for all cloud miners the world overheen presently suggesting their services to American consumers.
Just Another Regulatory Wrinkle
State-level regulators across the United States may go after South Carolina’s lead ter considering cloud mining contracts spil securities. Te the very least, many states will embark doing their own homework on the matter.
It’s an understandable dynamic, tho’ presently it’s not clear how much bite South Carolina’s pronouncement has on its own. Whether Genesis Mining submits to a hearing te the state to address the concerns or proceeds operations more or less unchanged remains to be seen.
The ball is ter the company’s court now. And the regulatory situation te the American cryptocurrency ecosystem just got yet another fold accordingly.
What’s your take? Do you consider cloud mining contracts to be securities? Sound off te the comments below.