From Australia to Texas Oil Patch, Crypto-Mining Promoters Recruiting for Pyramid Sales Network

Nov 7

Texas Securities Commissioner Travis J. Iles has entered emergency actions against promoters of cryptocurrency mining investments who are aggressively recruiting sales agents through LinkedIn, Facebook, and other online marketing channels.

The Securities Commissioner entered emergency cease and desist orders Nov. 6 against Quebec, Canada-based EXY Crypto, and AWS Mining PTY Ltd., based in Sydney, Australia. Both entities describe themselves as cryptocurrency mining companies.

The orders allege violations of the Texas Securities Act by those companies and certain affiliates, including crypto-mining promoters in the Texas cities of Midland, San Antonio, and Tyler.

The companies and individual respondents named in the orders have 31 days to challenge the findings at the State Office of Administrative Hearings.


AWS Mining PTY is the Australian business name holder for AWS Mining and MyCoinDeal. The latter provides digital wallet services for cryptocurrency investments issued by AWS Mining.

AWS Elite is one part of the multilevel marketing organization for AWS Mining. Its sales agents include the Midland-based West Texas Oilfield Cloud Miners Club (WTO Miners) and its principal, Kenneth Luster of Midland.

The companies and the sales agents named in the AWS Mining order are issuing investments in cryptocurrency mining, which they are calling crypto mining power contracts. AWS Mining claims it is mining cryptocurrency in computing facilities in China, Russia, and Paraguay.

According to the order, AWS is claiming the contracts are “guaranteed to 200% return on purchase price."The unlicensed sales agents are also touting this guarantee by representing the investments pay a “200% passive return on every investment.”

Although investors are being told they will receive a 200% return on the purchase of the contacts, AWS Mining is disclaiming the guarantee, instead passing the risks associated with cryptocurrency mining to investors. These risks include the volatility of cryptocurrencies, system or technical failures, and changes in the cost of electricity used to power and cool hardware.

According to the order, AWS Mining is using a multilevel marketing network of sales agents to sell the mining power contracts and are paying as many as six different types of bonuses and commissions to these sales agents.

Luster and WTO Cloud Miners are offering crypto mining power contracts in Texas and inviting potential investors to webinars hosted by AWS Elite.

The crypto mining power contracts are not registered to be sold in Texas and none of the companies, principals, and sales agents are registered to sell securities in Texas.


According to the order, Morgan Nolan, the San Antonio-based promotions manager for EXY Crypto, is offering the investments through LinkedIn, an online professional network with more than 562 million users worldwide.

Users, including Texas residents, are receiving advertisements for EXY Crypto in their LinkedIn feeds.

The strategy director for EXY Crypto, Melissa Spring, claims to live in Tyler and is also offering the investments through LinkedIn.

The advertisements claim investors will earn a weekly return of at least 10%, which is guaranteed “100% safe and secure.” They also falsely claim EXY Crypto is a licensed and registered company.

On its website EXY Crypto is promoting four levels of investments in cryptocurrency mining. For example, the company claims that a $1,000 investment will produce a return of 15% paid weekly.

The company is also recruiting investors to act as sales agents, promising them they can earn commissions based on the amount of new investment they bring in.

EXY and Nolan are falsely claiming that EXY is licensed to sell investments in cryptocurrency mining.

Nolan claims to be based in the United Kingdom, but he is from San Antonio and is asking potential investors to contact him by calling a number with an area code assigned to the San Antonio region.

EXY Crypto is intentionally not disclosing material facts about the investment, including the identity of the principals of the company, its place of business, and the costs and fees investors will incur in purchasing an investment in the mining program. Nor is the company disclosing the risks in the mining of cryptocurrencies.

Nolan and EXY Crypto are offering investments without being registered to sell securities in Texas, a violation of the Texas Securities Act. The company and Nolan are also recruiting investors who are not registered as dealers or agents to sell investments in the mining program.

Cryptocurrency Resources

Cyptocurrency Resources features:

  • Widespread Fraud Found in Cryptocurrency Offerings, a report on the Enforcement Division's investigation into offerings tied to virtual currencies
  • The 18 Enforcement actions the Securities Commissioner has taken in cryptocurrency-related administrative cases
  • A concise Cryptocurrency Glossary
  • Decrypting Cryptocurrency Scams, a Federal Trade Commission webcast on the emergence of scams tied to cryptocurrencies
  • Combatting Cryptocurrency Fraud, a Commodities Future Trading Commission panel on detecting and preventing fraud