North Carolina's government has sent a cease-and-desist order to a cryptocurrency company they say is selling unregistered securities in the U.S. state.
The North Carolina Secretary of State Securities Division issued a temporary cease-and-desist order on March 2 against the European project PowerMining Pool. The move comes just under two months after that department issued a cease-and-desist order that faulted the now-defunct investment scheme BitConnect for failing to register its offerings as securities.
Documents released by the state allege that PMP utilized problematic sales tactics. They also said the local PMP campaign violated the state's Securities Act with business practices that "threaten immediate and irreparable public harm."
PMP sells "shares" for bitcoin, claiming to mine seven different cryptocurrencies on behalf of its shareholders. The startup's site makes claims about shareholders reaping "totally passive" profits just hours after setting up an account and depositing bitcoin. Akin to other investment schemes, people are encouraged to solicit others and are promised additional rewards as a bonus.
That said, it's reportedly unclear if some of the names attached to the project are real people.
"The Securities Division has been unable to confirm whether Andrew Conti and Mike Conti, of central Europe, are real people," the order also states.
Crosswalk sign image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.