The Texas State Securities Board took emergency action on July 11, 2018 to stop a network of companies from fraudulently offering cryptocurrency and crypto mining investments to Texas residents.
The State Securities Board is responsible for administering and enforcing the Texas Securities Act and its mission is to protect investors, while not placing unreasonable burdens on legitimate capital-raising activities. The agency seeks to encourage capital formation, job formation, free and competitive securities markets and minimize burdens on issuers and persons subject to the Act, especially small businesses.
Per the Texas State Securities Board the companies targeted in the Emergency Cease and Desist Order are controlled by Darren Olayan of Lehi, Utah, and are based in Utah. They consist of:
Mintage Mining LLC, which is illegally and fraudulently issuing
and offering two different investments in the mining of cryptocurrencies;
Symatri LLC, which issued a new cryptocurrency called Kala
and, with Mintage Mining, is offering investors the opportunity to
own and possess pre-configured computer hardware to mine Kala;
NUI Social, a multi-level marketing company that purports to
have more than 300,000 members in 140 countries. NUI recruits
individuals for the cryptocurrency investments, with some of its
“members” eligible to earn commissions for the people they recruit.
The order also names Wyatt McCullough, who maintains an
addresses in Houston -- at an office park at 5829 West Sam Houston
Parkway—and is affiliated with NUI Social.
McCullough and a third individual named in the order, William
Douglas Whetsell, are publishing advertisements targeting Texas residents.
The advertisements claim that Mintage can generate extraordinary
returns—up to 250% annually—by successfully mining cryptocurrencies.
This is a good thing. The Texas State Securities Board should continue to crack down on fraudulent cryptocurrencies investments, while allowing the legitimate crypto businesses operate like any other legally operating business in Texas