US State Regulators Hit ‘Ultra BTC Mining’ With Cease-And-Desist Order

Securitas regulator in Texas and Alabama have jointly issued an emergency cease and desist order against a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term miner called 'Ultra BTC Mining LLC.' The flagged company is charged with running a fraudulent crypto mining scheme that allegedly defrauded investors out of $18 million.

On top of these charges, prosecutors accused Ultra BTC Mining of deploying elaborate tactics to lure victims with promises of large returns on their investments in computing power to mine Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

As originally introduced, investors in Ultra BTC mining operations would reportedly earn more than 100% on their initial investment, although, in fact, anyone who took this risk could have faced a loss on the investment.

These promising profits, however, were indeed too good to be true and did not factor the ever-increasing Bitcoin mining difficulty.

"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 regulator further explains.

After doing the math, to make the scheme play out according to the plan, the bitcoin price would need to more than fourfold this year.

Texans to watch out for virus scams

Details shared today by the state regulator further highlights the deceptive nature of the mining pool. Not only was it being carried out without licensing, but they were actually touting the company's charitable donations to assist victims of the coronavirus pandemic. Laura Branch, an agent of the company, weaved this fake claim into its pitch to lend credibility to the scam. Together with the "consistent returns" promise, it is what probably triggered a response from the Texas State Securities Board.

While they rewarded investors for recruiting new participants, the regulator describes these entities as fledgling companies with little to no actual business operations and few prospects for profitable operations. Specifically, the company operates an affiliate program that pays commissions up to 5 percent of the deposits from new investors.

Texas' watchdog is one of the most active state regulators in the crypto arena, joining federal authorities in going after businesses trying to avoid proper registrations.

More recently, the agency also warned Texans about persons that approach victims of the now-defunct pyramid scheme BitConnect claiming that, for a $250 fee, they can help them recover their investments.

Elsewhere, the Texas watchdog warned Texans last month about criminals trying to steal their funds using several scams tied to the coronavirus pandemic. The regulator also warns of the substantial potential for fraud at this time, saying that crooks often try to capitalize on high-profile news events to lure investors into financial cons.