The Securities Commissioner of South Carolina dismissed its previous order of nearly half a year ago against Genesis Mining. It’s rare, and some say this is a first for the state, as the Commissioner hasn’t previously withdrawn such an order. The company plans to resume services in the United States as a result. The case also might mark a turning point in such for firms beginning to fight back against regulators.
Also read: Ross Ulbricht Murder-for-Hire Indictment to Be Dismissed
South Carolina Securities Regulator Dismisses Previous Cease and Desist Order Against Genesis Mining
“We are happy to announce that the South Carolina securities division has dismissed Genesis Mining from its March 9, 2018, cease and desist,” wrote Shah Hafizi, chief compliance officer for Genesis Mining in reference to a cease and desist order being lifted by the state of South Carolina. “One of our company‘s principles is transparency. After all, it is a core value of blockchain technologies. Over the past five months, we’ve worked closely with South Carolina officials to educate them and provide a practitioner’s perspective on mining, blockchain networks and the decentralized nature of the technologies we support.”
Actually, two crypto related firms were gifted an order of dismissal this week from the Securities Commissioner of South Carolina. Both Genesis Mining and Ship Chain were issued cease and desist order withdrawal notices.
Ship Chain was accused of peddling securities disguised as tokens. Ship Chain pushed back, arguing such was not the case and how they were totally unaware residents of the state could even purchase their token, SHIP. In what appears to be a final decision in the case, Commissioner Meyers wrote the agency “after receiving information regarding matters detailed in the Administrative Order to Cease and Desist issued […] upon due consideration of such information, finds good cause has been shown to vacate the [order],” leaving Ship Chain off the hook.
Genesis Mining, on the other hand, was named a respondent in an unrelated case, also thought to be selling unregistered securities but with cloud mining contracts. It too had its order dismissed; however, co-respondent Swiss Gold, thought to be the mining company’s broker at the time, is still under order.
Genesis Conciliatory, Vows to Work with Regulators
Mr. Hafizi, Genesis COO, “By working together with regulators, we can ensure that investors are protected, and innovation is not stifled. We believe for the industry to reach its true potential, companies and regulators need to collaborate. We strongly encourage blockchain companies, regardless of where they are in the world, to proactively engage with local regulators at all levels.”
Registration, when it comes to business activity in any state, is a particularly touchy subject. Combine that fact with relatively exotic industry as cloud mining companies, and jumping to conclusions is an obvious result by regulators.
South Carolinians purchased hard drive power over blocks of time. To regulators, this appeared to be a form of investment contract, a security. As a result, the state Commission barred both Genesis and Swiss Gold from doing business in its boundaries. Swiss Gold remains under that restraint as of press time.
The Icelandic company, Genesis Mining, has been in the ecosystem for five years, and is one of the biggest cloud mining companies in the space.
Can companies recover after being cleared from an indictment? Let us know in the comments section below.
Images via Pixabay, State of South Carolina.
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via C. Edward Kelso
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