A Springfield, Missouri man, Kenneth A. Slaughter, has been fined $30,000 plus disgorgement of profits earned after allegedly violating securities laws with his bitcoin-mining companies.
He incorporated Active Mining Corporation in Belize and Virtual Mining Corporation in Delaware after acknowledging that his activities fell under a “very gray area” under US securities laws.
His companies reportedly sold “stocks” representing the future profits of bitcoin mining operations. As the value of bitcoin exploded in late 2013, Slaughter announced that he had made $6.3 million in sales. The websites for the companies are no longer active.
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In March 2014, he further acknowledged that the secretary of state had commenced an inquiry into his operations.
Last month, the Office of the Missouri Secretary of State finalized an order charging Slaughter with offering and selling unregistered, non-exempt securities; transacting business as an unregistered agent; employing or associating with an unregistered agent and making an untrue statement and omitting to state material facts in connection with the offer or sale of a security.
An Office spokeswoman said that Slaughter has failed to pay the penalties within the required 30-day period. Springfield attorney Chip Sheppard, who originally defended Slaughter, has said that his client has been unresponsive for weeks. The order also noted Slaughter’s lack of participation in the administrative process and said that he failed to attend proceedings on multiple occasions.